[Senate Hearing 110-1090]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 110-1090
 
        THE STATE OF MERCURY REGULATION, SCIENCE AND TECHNOLOGY

=======================================================================

                                HEARING

                               before the

              SUBCOMMITTEE ON CLEAN AIR AND NUCLEAR SAFETY

                                 of the

               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 16, 2007

                               __________

  Printed for the use of the Committee on Environment and Public Works


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                            congress.senate


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                               __________

               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED TENTH CONGRESS
                             FIRST SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
JOSEPH I. LIEBERMAN, Connecticut     JOHN W. WARNER, Virginia
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
HILLARY RODHAM CLINTON, New York     JOHNNY ISAKSON, Georgia
FRANK R. LAUTENBERG, New Jersey      DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland         LARRY E. CRAIG, Idaho
BERNARD SANDERS, Vermont             LAMAR ALEXANDER, Tennessee
AMY KLOBUCHAR, Minnesota             CRAIG THOMAS, Wyoming
SHELDON WHITEHOUSE, Rhode Island     CHRISTOPHER S. BOND, Missouri

       Bettina Poirier, Majority Staff Director and Chief Counsel
                Andrew Wheeler, Minority Staff Director
                              ----------                              

              Subcommittee on Clean Air and Nuclear Safety

                  THOMAS R. CARPER, Delaware, Chairman
JOSEPH I. LIEBERMAN, Connecticut     GEORGE V. VOINOVICH, Ohio
HILLARY RODHAM CLINTON, New York     JOHNNY ISAKSON, Georgia
BERNARD SANDERS, Vermont             LAMAR ALEXANDER, Tennessee
BARBARA BOXER, California (ex        JAMES M. INHOFE, Oklahoma (ex 
    officio)                             officio)


                            C O N T E N T S

                              ----------                              
                                                                   Page

                              MAY 16, 2007
                           OPENING STATEMENTS

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     1
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware..     3
Voinovich, Hon. George V., U.S. Senator from the State of Ohio...     4
Sanders, Hon. Bernard, U.S. Senator from the State of Vermont, 
  prepared statement.............................................   155

                               WITNESSES

Collins, Hon. Susan, U.S. Senator from the State of Maine........     8
    Prepared statement...........................................    10
Schanbacher, David, chief engineer, Texas Commission on 
  Environmental Quality..........................................    12
    Prepared statement...........................................    14
    Report, Mercury in Texas: Background, Federal Rules, Control 
      Technologies, and Fiscal Implications...................... 17-92
Scott, Douglas P., director, Illinois Environmental Protection 
  Agency.........................................................    93
    Prepared statement...........................................    95
    Responses to additional questions from Senator Sanders.......   106
Keating, Martha Hastay, associate in research, Children's 
  Environmental Health Initiative, Nicholas School of the 
  Environment and Earth Sciences, Duke University................   114
    Prepared statement...........................................   116
    Responses to additional questions from Senator Sanders.......   120
Pipitone, Guy L., senior vice president of Operations, Strategy, 
  and Development, Firstenergy Corporation.......................   123
    Prepared statement...........................................   124
    Chart, Integrated ECO-ECO2 Installation..........   126
Foerter, David C., executive director, Institute of Clean Air 
  Companies......................................................   127
    Prepared statement...........................................   129
Levin, Leonard, technical executive, Air Quality Health and Risk 
  Assessment, Electric Power Research Institute..................   131
    Prepared statement...........................................   134

                          ADDITIONAL MATERIAL

Statement, Jackson, Lisa P., Commissioner, New Jersey Department 
  of Environmental Protection....................................   156
    Responses to questions from Senator Sanders.................170-308


        THE STATE OF MERCURY REGULATION, SCIENCE AND TECHNOLOGY

                              ----------                              


                        WEDNESDAY, MAY 16, 2007

                               U.S. Senate,
         Committee on Environment and Public Works,
              Subcommittee on Clean Air and Nuclear Safety,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:03 a.m. in 
room 406, Dirksen Senate Office Building, the Hon. Thomas 
Carper (chairman of the subcommittee) presiding.
    Present: Senators Carper, Inhofe, Voinovich. Also, Senator 
Collins.
    Senator Carper. The subcommittee will come to order. 
Welcome, everyone.
    We are looking forward to the testimony and the opportunity 
to have an exchange with our witnesses. We are also looking 
forward to four votes that start at 10:30 a.m. There are a lot 
of committee hearings and markups going on right now that are 
figuring out what are they going to do. What we are going to do 
is go ahead and Senators will make their opening statements. We 
will be joined by Senator Collins and she will make a 
statement.
    My hope is we will have a chance for the second panel to at 
least make opening statements. While they are wrapping it up, 
we will run off and vote four times, and then come back and try 
to finish it up before supper time. No, hopefully a lot sooner 
than that.
    This is a hearing on the state of mercury regulation, 
science and technology. Before we begin, just a couple of 
procedural matters to lay to bed. I am going to give a brief 
opening statement and then turn it over to Senator Inhofe for 
his statement and others who come along.
    Senator Collins is, I think, offering an amendment on the 
Floor right now. Once she gets here, we will recognize her to 
offer some of her views.
    I am going to hold off because one of our Floor managers 
for the Water Resources Development bill is Senator Inhofe, 
along with Senator Boxer. He needs to get back over to the 
Floor, so Senator Inhofe, why don't you just go ahead and say 
whatever is on your mind, and then I will take it from there.

STATEMENT OF HON. JAMES INHOFE, U.S. SENATOR FROM THE STATE OF 
                            OKLAHOMA

    Senator Inhofe. All right. Well, thank you, Mr. Chairman. I 
am sorry that I can't stay. Barbara Boxer and I are managing 
the WRDA bill on the Floor, which is probably the biggest non-
defense bill of the year, so it is a very significant one.
    I thank you for holding this subcommittee hearing on 
mercury perspectives, science and technology. I have to say, it 
is such a pleasure for me to be sitting in here in a hearing 
that is not on global warming. So I thank you very much. This 
is a first in--what?--3 months now.
    Anyway, there is a lot of work to be done. For instance, 
there are still some areas that are out of compliance with 
particulate matter standards and serious non-attainment with 
ozone standards. I recommend this subcommittee examine what can 
be done to bring these highly polluted areas into compliance 
with existing laws.
    But we can't let the failures of these few counties 
distract us from the enormous progress that we have made in 
cleaning up pollution in this country. Since 1970, we have had 
tremendous economic growth and tripled our energy use and 
vehicle miles traveled. Despite this, instead of tripling our 
pollution or doubling or even holding it constant, we have cut 
our pollution levels by more than half. That is really amazing. 
When you tell people that, they don't believe it. We have 
tripled the mileage, and yet we have cut the pollution in half.
    So some things are working, Mr. Chairman. This gets to the 
heart of my greatest concern over the mercury debate. Few 
understand it, and some have preyed upon the lack of 
understanding. We are literally scaring ourselves to death over 
mercury. A few years ago when the EPA and the FDA issued the 
Joint Advisory on Mercury, environmentalists turned up their 
alarmist rhetoric and tuna consumption plummeted, and people 
became afraid to eat fish because they believed that it is all 
bad for them. Let's be clear. We all know that all seafood has 
some level of mercury. It always has and always will. It is an 
element pervasive in the environment and bioaccumulative.
    The question is not whether mercury causes birth defects or 
even kills in high doses. It does in high doses. The question 
is whether it is harmful to the extreme in low quantities. 
According to the biggest and best designed and longest running 
study ever done, the answer is no.
    I just hope that we don't resort to scare tactics, as we so 
often do in this committee. Even back in the years when I was 
the Chairman of this committee, we would hear people saying the 
world is always coming to an end, and so we are all going to 
die. But let's try to be reasonable, try to look at this, and 
approach this in such a way.
    I would ask with that, Mr. Chairman, that my entire 
statement be placed into the record.
    Senator Carper. Without objection.
    [The prepared statement of Senator Inhofe follows:]

       Statement of Hon. James M. Inhofe, U.S. Senator from the 
                           State of Oklahoma

    Thank you, Mr. Chairman, for holding this subcommittee hearing on 
mercury perspectives, science and technology. I must say it is a 
pleasure to attend a hearing on something other than global warming. 
The issue of clean air is an important one, and is an issue this 
Committee should be focused on.
    There is much work to be done. For instance, there are still some 
areas that are out of compliance with particulate matter standards and 
in serious nonattainment with ozone standards. I recommend this 
Subcommittee examine what can be done to bring these highly polluted 
areas into compliance with existing law.
    But we cannot let the failures of these few counties distract us 
from the enormous progress we have made in cleaning up pollution in 
this country. Since 1970, we have had tremendous economic growth, and 
tripled our energy use and vehicle miles traveled. Despite this, 
instead of tripling our pollution or doubling or even holding it 
constant, we have cut our pollution levels by more than half. This is a 
success story that--hard as it is to believe--few people even realize 
is true.
    This gets to the heart of my greatest concern over the mercury 
debate. Few understand it, and some have preyed upon that lack of 
understanding. We are literally scaring ourselves to death over 
mercury. A few years ago, when EPA and the FDA issued a joint advisory 
on mercury and environmentalists turned up their alarmist rhetoric, 
tuna consumption plummeted. People became afraid to eat fish because 
they believed it was bad for them.
    Let's be clear: all seafood has some level of mercury--always has 
and always will. It is an element, pervasive in the environment and 
bioaccumulative. The question is not whether mercury causes birth 
defects and even kills in high doses--it does. The question is whether 
it's harmful in extremely low quantities. According to the biggest, 
best designed and longest running study ever done, the answer is a 
resounding ``NO.''
    What most people do not realize is that the dose makes the poison. 
Fish is brain food. A diet rich in omega-3 fatty acids reduces colon 
and lung cancers and numerous other ailments, and aids brain 
development in the womb. The Seychelles Islands study found that, even 
though their seafood-rich diet meant they consumed more mercury than 
Americans, eating the seafood was beneficial. Let me repeat: by 
discouraging people from eating fish, we are literally scaring them to 
death.
    That isn't to say we shouldn't make progress in bringing down 
mercury levels. We should and we are. But we need to put the issue in 
perspective.
    Like other pollutants, mercury levels have also come down 
dramatically. Numerous industries that used to emit high levels of 
mercury, such as the municipal waste incinerators, have been 
controlled. The power sector industry is merely the latest industry to 
be regulated. And the regulations are significant--the Clean Air 
Mercury Rule will reduce powerplant mercury emissions by 70 percent. 
And because the rule acts in coordination with the Clean Air 
Implementation Rule--which reduces SO2, NOx, and particulate 
matter--it can be done for $2 billion.
    While there are many promising technologies on the horizon, some of 
which we will hear about today, no technology exists for which vendors 
will guarantee 90 percent mercury reductions, and some of these 
technologies are not appropriate for plants that are already 
controlled. According to the Energy Information Administration, setting 
a 90 percent reduction mandate on mercury over three years would cost 
up to $358 billion. That's right--cutting 70 percent will cost $2 
billion, but incrementally increasing that amount to beyond what the 
technologies can reliably do would cost up to $358 billion.
    Mr. Chairman, we all agree that reducing pollution levels in this 
country is important and that more can be done. But we cannot let 
political preferences let us lose sight of the fact that diverting 
enormous economic resources to this comparatively smaller problem away 
from the important mission of bringing ozone and soot levels into 
compliance with existing law is wrong-headed. And we cannot lose sight 
of the fact that this scaremongering is doing more harm to the health 
of our citizens than the very small incremental reductions that 
tightening the mercury standard further would achieve.
    Thank you.

STATEMENT OF HON. THOMAS CARPER, U.S. SENATOR FROM THE STATE OF 
                            DELAWARE

    Senator Carper. Thank you, Senator Inhofe.
    Welcome, Senator Voinovich.
    Two years ago, the Bush administration finalized, as you 
may recall, the Clean Air Mercury Rule. Remember that the rule 
requires reductions in mercury really in two phases. The first 
phase starts in the year 2010. It requires a 22 percent 
reduction of mercury emissions from powerplants by then. These 
reductions will be achieved as a side effect of the clean air 
interstate rule, meaning no specific actions will be required 
to attain this rule, which I believe is weak.
    When it was finalized, opponents of the Clean Air Mercury 
Rule argued that the technology to limit mercury emissions does 
not exist and that stricter limits would cause utilities to 
switch from coal to natural gas. To put it simply, though, 
these critics have been proved wrong. The EPA was wrong, I 
believe, not to act more aggressively to limit the emissions of 
a pollutant that has serious health effects on children and 
pregnant women, some of the most vulnerable members of our 
society.
    Today, we know that the technology to control mercury does 
exist. We know that companies burning a variety of coal types 
are moving forward with plans to install this technology to 
comply with the more stringent State requirements that have 
been adopted. Instead of pretending that we can't do more, we 
need to look at the reality of this issue. That is what we plan 
to do today.
    The reality is that mercury is a potent neurotoxin that 
affects the brain, the heart, and our immune system. Developing 
fetuses, children, and pregnant women are especially at risk. 
Even low level exposure to mercury can cause learning 
disabilities, developmental delays, lower IQ, and problems with 
attention and with memory.
    Today, we are going to hear from States that have taken 
action to protect their citizens from mercury pollution. These 
States are requiring their pipelines to reduce their emissions 
by at least 90 percent.
    We are also going to hear testimony on the growing 
scientific evidence of mercury hotspots and the health effects 
of mercury.
    Last, we will hear testimony on the reality of mercury 
control technology. It is affordable. It is available. It is 
reliable.
    It is an understatement to say that the Clean Air Mercury 
Rule is too weak. That is why I have introduced, along with a 
number of our colleagues, some on this committee and some not, 
legislation requiring every coal-fired plant in our country to 
reduce their mercury emissions by 90 percent no later than the 
year 2015.
    When EPA introduced the Clean Air Mercury Rule, they did 
get at least one thing right. EPA coupled the Mercury Rule with 
the nitrogen oxide and the sulfur dioxide requirements of the 
clean air interstate rule. When dealing with air pollution from 
powerplants, it makes sense to address all the pollutants at 
the same time, whether it is ozone-forming nitrogen oxide or 
asthma-causing sulfur dioxide, toxic mercury emissions or 
global warming caused by carbon dioxide, they all come out of 
the same smokestack. By addressing all four pollutants as a 
system, powerplants will have the flexibility and the 
regulatory certainty needed to plan for the most cost-effective 
control strategy.
    With that said, I am pleased to yield to my compadre here, 
Senator Voinovich. I am delighted that we have some witnesses 
from your State, from Ohio, and I am anxious to hear from them, 
and now from you.

STATEMENT OF HON. GEORGE VOINOVICH, U.S. SENATOR FROM THE STATE 
                            OF OHIO

    Senator Voinovich. Thanks very much.
    As we are all well aware, we worked very, very hard in this 
committee during the last Congress to come up with a bipartisan 
multi-emissions bill which would reduce powerplant emissions of 
mercury, nitrogen oxide, and sulfur dioxide. Despite our 
valiant efforts, in the end there didn't seem to be a path 
forward. We couldn't get it done.
    Mr. Chairman, I commend you for holding this hearing to 
continue our debate on this very important subject. I would 
like to thank Guy Pipitone, senior vice president of 
Operations, Strategy and Development at First Energy, from my 
home State, for being here today to discuss technology options 
to address mercury emissions.
    The harmful health effects of mercury, especially to 
fetuses and pregnant women, are well established. There is no 
one arguing about that. It is harmful. However, what often gets 
overlooked in these debates is the fact that mercury pollution 
is a global issue because it can travel hundreds and thousands 
of miles before depositing in land and water. Most of the 
mercury disposition in our Nation that comes from manmade 
sources is coming from overseas. According to the Environmental 
Protection Agency, Asia is responsible for 53 percent of 
mercury emissions worldwide, and that U.S. powerplants 
contribute only about 1 percent of the mercury in the oceans, 
which is what we are talking about today.
    In fact, according to the U.S. EPA, U.S. emissions of 
mercury were reduced by nearly half from 1990 to 1999. While we 
have made great progress in reducing these emissions, they have 
often been offset by increases in emissions from Asia, 
particularly China, and it is not going to get any better when 
you consider the fact that China is going to be building a new 
coal-fired plant every week for the next couple of years.
    Still, by finalizing both the clean air interstate rule and 
Clean Air Mercury Rule in 2005, the United States became the 
first nation in the world to regulate mercury emissions from 
existing coal-fired powerplants, the first in the world. The 
clean air interstate rule is designed to leverage reduction in 
emission requirements for other pollutants such as sulfur 
dioxides and nitrogen oxides to control mercury emissions, as 
Senator Carper emphasized, but we did NOx, SOx, and mercury.
    The Clean Air Mercury Rule will complement the other rule 
by establishing a cap and trade program for cutting overall 
powerplant mercury emissions from the current level of 48 tons 
annually to 38 tons in 2010, 15 tons is 2018, for a total 
reduction of 70 percent. This is modeled after the Nation's 
most successful clean air program, the Acid Rain Program. 
Utilities able to reduce emissions more than required can sell 
excess emission allowances to facilities for which achieving 
reductions is less cost effective or technologically too 
difficult.
    These rules were developed through one of the most 
extensive rulemakings ever conducted for clean air regulations, 
culminating in nearly 15 years in the making, and reflect the 
most detailed scientific record ever established in developing 
this type of pollution reduction program.
    However, several of my colleagues have expressed support 
for a maximum achievable control technology standard called the 
MACT standard to reduce mercury emissions from every powerplant 
by 90 percent within 3 years. Proponents of this approach 
generally claim that each powerplant should be able to reduce 
mercury emissions by at least 90 percent, even though this 
level of reduction is not currently achievable and no control 
technology vendor will guarantee the performance of mercury 
removal technologies at this or any other specific level in the 
future.
    A MACT standard would have a devastating impact on our 
Nation because coal plants unable to attain it would be shut 
down. This would result in fuel switching from coal, which is 
our most abundant and least costly energy source, to natural 
gas. I know all about that. In my State, 85 percent of our 
energy comes from coal, and natural gas costs have increased 
300 percent, having a terrible impact on our economy.
    Increased reliance on natural gas for electricity 
generation will further increase prices, seriously impacting 
the ability of businesses to compete in the global marketplace, 
and the families that pay their utility bills. By the way, Mr. 
Chairman, we always forget about the families and their utility 
bills: 300 percent since 2000 in my town, and Cleveland is 
known for the most poverty. It is having a very, very negative 
effect, but we never even consider them when we start talking 
about some of the things that we do here.
    Well, EPA estimates the cost of its cap and trade rule at 
about $2 billion. The Independent Energy Information 
Administration has projected costs as high as $358 billion for 
a 90 percent MACT standard. The public's return for such a 
regulation is an average increase in national electricity 
prices of about 20 percent--more in States like mine that rely 
primarily on coal for electricity--and an additional reduction 
in U.S. mercury disposition of just 2 percent, and an almost 
immeasurable decline in people's exposure to mercury.
    The question we face on this committee is whether we should 
do something reasonable to improve our understanding of the 
issues surrounding mercury emissions and attempt to reduce--I 
am having a tough time this morning, because I was on the radio 
since 6 o'clock this morning; we had two early morning radio 
people on and I did a lot of talking--atmospheric 
concentrations of mercury emissions without harming our 
economy, or rush into short-sighted policy that will cap 
mercury at unreasonable levels, shut down our economy, and cut 
thousands of jobs, and move manufacturing overseas to countries 
that do not have these environmental standards.
    I will never forget, Mr. Chairman, Jim Jeffords 4 or 5 
years ago. We were debating with each other, and I said, ``You 
know, Jim, what this is going to do it is going to eliminate 
jobs in my State. Jim, they are not going to Vermont. They are 
not going to Vermont. Those jobs are going overseas.''
    So what we have to do is something that you and I talked 
about a long time ago, is somehow get our environment, get our 
energy, and get our economy in the same room and figure out how 
we work together, and make people realize that we have a 
symbiotic relationship. The more we work together and figure 
this out, the better off everyone is going to be, and we will 
make some real headway on environmental issues, and on energy 
challenges, and we will also have some movement forward in 
terms of our economy.
    Thank you.
    [The prepared statement of Senator Voinovich follows:]

     Statement of Hon. George V. Voinovich, U.S. Senator from the 
                             State of Ohio

    Thank you Mr. Chairman. As you are well aware, we have worked hard 
on this Committee during the last Congress to come up with a bipartisan 
multi-emissions bill, which would reduce powerplant emissions of 
mercury, nitrogen oxides, and sulfur dioxide. Despite our valiant 
efforts, in the end, there did not seem to be a path forward.
    Mr. Chairman, I commend you for holding this hearing to continue 
our debate on this very important issue. And, I would like to thank Guy 
Pipitone, Senior Vice President of Operations, Strategy and Development 
at First Energy--from my home state--for being here to discuss 
technology options to address mercury emissions. The harmful health 
effects of mercury, especially to fetuses and pregnant women, are well 
established.
    However, what often gets overlooked in these debates is the fact 
that mercury pollution is a global issue because it can travel hundreds 
and thousands of miles before depositing in land and water. Most of the 
mercury deposition in our nation that comes from manmade sources is 
coming from overseas.
    According to the Environmental Protection Agency, Asia is 
responsible for 53 percent of mercury emissions worldwide, and that 
U.S. powerplants contribute only about 1 percent of the mercury in the 
oceans, which is what we are talking about today. In fact, according to 
EPA, U.S. emissions of mercury were reduced by nearly half, from 1990 
to 1999. While we have made great progress in reducing these emissions, 
they have been offset by increases in emissions from Asia, particularly 
China.
    Still, by finalizing both the Clean Air Interstate Rule and Clean 
Air Mercury Rule in 2005, the United States became the first nation in 
the world to regulate mercury emissions from existing coal-fired 
powerplants. The first in the world!
    The Clean Air Interstate Rule is designed to leverage reduction in 
emission requirements for other pollutants, such as sulfur dioxides and 
nitrogen oxides, to control mercury emissions. The Clean Air Mercury 
Rule will complement the other rule by establishing a ``cap-and-trade'' 
program for cutting overall powerplant mercury emissions from the 
current level of 48 tons annually, to 38 tons in 2010 and 15 tons in 
2018, for a total reduction of 70 percent.
    This is modeled after the nation's most successful clean air 
program--the Acid Rain Program. Utilities able to reduce emissions more 
than required can sell excess emission allowances to facilities for 
which achieving reductions is less cost-effective or technologically 
too difficult.
    These rules were developed through one of the most extensive 
rulemakings ever conducted for clean air regulations, culminating in 
nearly 15 years in the making and reflect the most detailed scientific 
record ever established in developing this type of pollution reduction 
program.
    However, several of my colleagues have expressed support for a 
Maximum Achievable Control Technology standard--called a MACT 
standard--to reduce mercury emissions from every powerplant by 90 
percent within three years. Proponents of this approach generally claim 
that each powerplant should be able to reduce mercury emissions by at 
least 90 percent, even though this level of reduction is not currently 
achievable and no control technology vendor will or can guarantee the 
performance of mercury removal technologies at this or any other 
specific level in the future.
    A MACT standard would have a devastating impact on our nation 
because coal plants unable to attain it would be shutdown. This would 
result in fuel switching away from coal, which is our most abundant and 
least costly energy source, to natural gas.
    Increased reliance on natural gas for electricity generation will 
further increase prices, seriously impacting the ability of businesses 
to compete in the global marketplace and of families to pay their 
utility bills.
    While EPA estimates the cost of its cap-and-trade rule at about $2 
billion, the independent Energy Information Administration has 
projected costs as high as $358 billion for a 90-percent MACT standard. 
The public's return for such a regulation is an average increase in 
national electricity prices of 20 percent--more in states like mine 
that rely primarily on coal for electricity--an additional reduction in 
U.S. mercury deposition of just 2 percent, and an almost immeasurable 
decline in people's exposure to mercury.
    The question we face on this Committee is whether we should do 
something reasonable to improve our understanding of the issues 
surrounding mercury emissions and attempt to reduce atmospheric 
concentrations of mercury emissions without harming our economy--or 
rush into a short-sighted policy that will cap mercury at unreasonable 
levels, shut down our economy, cut thousands of jobs (particularly in 
manufacturing states like Ohio), and move manufacturing overseas to 
countries that do not have environmental standards?
    We need to work with both business and environmental groups to find 
a bipartisan solution that makes a common sense in dealing with mercury 
emissions with an emphasis on sound science, and development of mercury 
control and clean coal technologies--a responsible approach that 
harmonizes our energy, environment, and economic needs.
    Mr. Chairman, thank you once again for holding this important 
hearing, and I look forward to hearing the testimony from our 
witnesses.

    Senator Carper. Thank you, Senator Voinovich.
    Pretty good timing, Senator Collins. I will give you time 
to grab a seat and have a drink of water if you want. My hope 
is that we have literally in this room today, starting with our 
first panelist, Senator Collins, followed by our other two 
panels, some of the folks who can help us answer those 
questions. Is it possible to reduce the emissions of mercury? 
Is it possible to do so in a way that doesn't push our economy 
into a tailspin? Is it possible to do so in a way that doesn't 
disadvantage consumers of electricity? Does it do so in a way 
that doesn't push production of electricity from coal to 
natural gas, and further spike natural gas prices?
    I really look forward to this hearing, because I think we 
are going to find the answers to those questions. I think they 
may surprise us, I hope pleasantly so.
    We are delighted, Senator Collins, that you have joined us. 
I understand you rushed over from the Floor, and you are good 
to come. We appreciate very much your testimony and your 
willingness to work with us as a cosponsor of our legislation 
that addresses sulfur dioxide, nitrogen oxide, mercury, and 
CO2. Please take as much time as you wish. Welcome 
and thank you for coming.

STATEMENT OF HON. SUSAN COLLINS, U.S. SENATOR FROM THE STATE OF 
                             MAINE

    Senator Collins. Thank you, Mr. Chairman.
    I did run over from the Floor, but I so appreciate your 
invitation to speak today in support of the comprehensive 
National Mercury Monitoring Act of 2007. I have the great 
pleasure to work with both Chairman Carper and the Ranking 
Minority member, Senator Voinovich, on the Homeland Security 
Committee. It is a great honor to appear before both of you 
today.
    Let me begin by thanking Chairman Carper for his leadership 
in introducing the Clean Air Planning Act. This legislation 
would reduce mercury emissions at powerplants by 90 percent by 
2015. It would also address the pollutants that cause smog, 
acid rain, and climate change. I am very pleased to join the 
chairman as an original cosponsor of this important bill.
    There are also two other members of the subcommittee, 
Senators Lieberman and Clinton, who I have worked very closely 
with and who joined me earlier this year in introducing the 
Mercury Monitoring Act. This bill would establish mercury 
monitoring sites across the Nation in order to measure mercury 
levels in the air, rain, lakes, streams, as well as in plants 
and animals.
    Our bill would authorize $18 million in fiscal year 2008, 
and additional funding through 2013, for the EPA, the U.S. 
Geological Survey, the U.S. Fish and Wildlife Service, and the 
National Oceanic and Atmospheric Administration, NOAA, to 
perform scientific mercury measures. These agencies would 
measure long-term changes in mercury levels in the air and 
watersheds, including mercury levels in plants and animals at 
multiple monitoring sites in different ecosystems across the 
country.
    The Act would also create an advisory committee to advise 
the administrator of the EPA in choosing where these sites 
should be across the country. Now, I don't think that I need to 
tell anyone on this committee that in the wrong form, mercury 
is an acutely dangerous neurotoxin that can cause serious 
developmental harm, especially to children and pregnant women.
    In fact, recent studies indicate that at least 6 percent of 
women of childbearing age in this country carry enough 
accumulated mercury in their bodies to pose the risk of adverse 
health effects to their children should they become pregnant. I 
think that is very alarming, Mr. Chairman, and it is one reason 
that I feel so strongly that we need to know more about how 
mercury is accumulating in our environment, as well as its 
consequences.
    Tragically, EPA scientists have found that some 630,000 
infants were born in the United States in a 12-month period 
from 1999 to 2000 with blood mercury levels higher than what is 
considered safe. To see just how toxic mercury is, one does not 
have to look any further than my home State of Maine. It always 
concerns me that every single freshwater lake, river and stream 
in the State of Maine is subject to a mercury advisory warning 
that pregnant women and young children should limit their 
consumption of fish caught in these waters.
    Of course, Maine is a State that prides itself on clean air 
and clean water and a beautiful environment, and yet there are 
warnings on all of our freshwater lakes, streams, and rivers 
about mercury. This advisory is especially difficult for 
indigenous peoples like those of the Penobscot Indian Nation, 
for whom sustenance fishing is historically an important part 
of their culture.
    Mercury is dangerous not only to people, but also to 
wildlife. The Biodiversity Research Institute in Gorham, ME has 
found mercury concentrations in loon eggs in Maine that were 
dangerously high, nearly four times higher than those found in 
Alaska. EPA issued its Clean Air Mercury Rule in 2005 in order 
to help address this problem. But unfortunately, this rule 
really did not do the job. I don't believe that it was based on 
sound science.
    Senator Lieberman and I met with EPA Administrator Johnson 
in 2005 in order to express our concerns over this rule. At 
that time, Mr. Johnson presented to us a number of charts 
depicting mercury problems across the United States, and in 
particular in the Northeast. I later found out in consulting 
with scientists that these charts were seriously flawed. They 
were based on computer measurements that were not peer-reviewed 
and that had not been verified with actual measurements.
    The extent of the flaws in the EPA data became apparent 
earlier this year with the publication of several new studies. 
These studies by individuals at the Biodiversity Research 
Institute in Gorham, ME, as well as researchers at Syracuse 
University, demonstrate the existence of mercury hotspots in 
the northeastern United States, and attribute much of the cause 
of these hotspots where mercury is concentrated to emissions 
from powerplants.
    The studies conflict markedly with EPA's computer modeling 
data, which were used to justify the EPA mercury rule. For 
example, the study showed that mercury deposition is five times 
higher than previously estimated near a coal plant in southern 
New Hampshire. What I think these studies demonstrate, Mr. 
Chairman, is the need for real world mercury measurements, not 
just computer models.
    Mr. Chairman, I know that we are under a time constraint 
this morning because of the votes that are coming up. Let me 
just close by saying that the EPA inspector general also issued 
a report a year ago saying that monitoring was needed to assess 
the impact of EPA's Clean Air Mercury Rule on these potential 
hotspots. That is exactly what this legislation would do.
    Now, I know that some of our colleagues have different 
opinions on the EPA's mercury rule, and I certainly respect 
those opinions. But certainly, we all ought to be able to agree 
that the EPA ought to be basing its actions on the very best 
scientific measurements possible, and that is the purpose of 
the bill, the bipartisan bill that I have introduced.
    It would provide those scientific measurements across the 
United States, help us identify the hotspots, help us identify 
the causes. So I would ask unanimous consent that my entire 
statement be put in the record, but I thank you very much for 
the opportunity to be here today to testify about something 
that I feel very strongly about.
    Thank you, Mr. Chairman, and thank you, Senator Voinovich.
    [The prepared statement of Senator Collins follows:]

  Statement of Hon. Susan M. Collins, U.S. Senator from the State of 
                                 Maine

    Chairman Carper, Ranking Member Voinovich, and Members of the 
Committee, I appreciate the opportunity to speak in support of the 
Comprehensive National Mercury Monitoring Act of 2007.
    Let me begin by thanking Chairman Carper for his leadership in 
introducing the Clean Air Planning Act. This legislation would reduce 
mercury emissions at powerplants by 90 percent by 2015. It would also 
address the pollutants that cause smog, acid rain, and climate change. 
I was pleased to join Senator Carper earlier this year as an original 
cosponsor of this important legislation.
    I also want to thank two distinguished members of this 
subcommittee, Senators Lieberman and Clinton, who joined me earlier 
this year in introducing the Mercury Monitoring Act. This legislation 
would establish mercury monitoring sites across the nation in order to 
measure mercury levels in the air, rain, soil, lakes and streams, as 
well as in plants and animals.
    Our legislation would authorize $18 million in fiscal year 2008, 
and additional funding through 2013, for the Environmental Protection 
Agency, United States Geological Survey, United States Fish and 
Wildlife Service, and the National Oceanic and Atmospheric 
Administration to perform scientific mercury measurements. These 
agencies would measure long-term changes in mercury levels in the air 
and watersheds, including mercury levels in plants and animals, at 
multiple monitoring sites in different ecosystems across the country. 
The Act would create a ``Mercury Monitoring Advisory Committee'' to 
advise the Administrator of the EPA in choosing the monitoring sites.
    I do not think I need to tell anyone on this Committee that, in the 
wrong form, mercury is an acutely dangerous toxin that can cause 
serious neurodevelopmental harm, especially to children and pregnant 
women. In fact, recent studies indicate that at least 6 percent of 
women of childbearing age in the United States carry enough accumulated 
mercury in their bodies to pose the risk of adverse health effects to 
their children, should they become pregnant. Tragically, scientists at 
the Environmental Protection Agency found that some 630,000 infants 
were born in the United States in a 12-month period from 1999 to 2000 
with blood mercury levels higher than what is considered safe.
    To see just how toxic mercury is, one does not have to look any 
farther than my home state of Maine. Every freshwater lake, river, and 
stream in my state is subject to a mercury advisory warning pregnant 
women and young children to limit consumption of fish caught in these 
waters. This advisory is especially difficult for indigenous peoples, 
like those of the Penobscot Indian Nation, for whom subsistence fishing 
is an historically important part of their culture.
    Mercury is dangerous not only to people, but also to wildlife. The 
Biodiversity Research Institute in Gorham, Maine, found that mercury 
concentrations in loon eggs in Maine were dangerously high, nearly four 
times higher than those found in Alaska.
    EPA issued the Clean Air Mercury Rule in 2005 in order to help 
address our nation's mercury problem. Unfortunately, this rule did not 
go far enough. I believe it was not based on sound science.
    Senator Lieberman and I met with EPA Administrator Johnson in 2005 
in order to express our concerns over this rule. At that time, Mr. 
Johnson presented a number of charts depicting the mercury problem 
across the United States, and in particular, in the Northeast. As I 
later found out, these charts were seriously flawed. They were based on 
computer measurements that were not peer-reviewed and that were not 
verified with actual measurements.
    The extent of the flaws in the EPA data became apparent earlier 
this year with the publication of several new studies. These studies, 
by David Evers and Wing Goodale of the Biodiversity Research Institute 
in Gorham, Maine, as well as researchers at Syracuse University, 
demonstrate the existence of mercury hotspots in the northeastern 
United States and attribute much of the cause of the hotspots to 
emissions from powerplants.
    These studies conflict markedly with EPA's computer modeling data 
which were used to justify the EPA mercury rule. For example, the 
studies showed that mercury deposition is five times higher than 
previously estimated near a coal plant in southern New Hampshire. These 
studies demonstrate the need for real-world mercury measurements--not 
just computer models.
    The EPA Inspector General issued a report exactly one year ago 
yesterday titled ``Monitoring Needed to Assess Impact of EPA's Clean 
Air Mercury Rule on Potential Hotspots.'' This report noted that, 
``without field data from an improved monitoring network, EPA's ability 
to advance mercury science will be limited and `utility-attributable' 
hotspots that pose health risks may occur and go undetected.'' The 
report recommended that EPA develop and implement a mercury monitoring 
plan.
    I realize that some of my colleagues have a different opinion on 
EPA's mercury rule, and I respect their opinion. I hope, however, we 
can all agree that any EPA rule should be based on the best scientific 
measurements possible. I believe the Comprehensive National Mercury 
Monitoring Act would provide the scientific measurements we need in 
order to more accurately assess the extent of the mercury problem in 
this country, and to provide better information on how to address this 
serious problem.
    I thank Chairman Carper, Ranking Member Voinovich, and the members 
of this Subcommittee for providing this opportunity for me to appear 
before you today.

    Senator Carper. Senator Collins, thank you very much. 
Without objection, your full statement will appear in the 
record. We are very grateful. We know this has been a hectic 
morning for you and we are grateful that you were able to work 
us into your schedule, and we look forward to working with you 
on this issue, as I have with others in the past.
    Senator Collins. Thank you.
    Senator Carper. My family and I are going on a vacation in 
August, and among the places we are considering is Acadia 
National Park in Maine. Now that I know we can't eat the fish 
that we catch there, I am sure we have to revisit this.
    Senator Collins. I would encourage you to come anyway. You 
are not of childbearing age anymore.
    [Laughter.]
    Senator Carper. You never know these days. Remember what we 
used to say to Strom Thurmond.
    [Laughter.]
    Senator Carper. All right. Again, thank you.
    Senator Collins. Thank you.
    Senator Carper. Thank you so much.
    We are going to try to do as best we can with this next 
set. Senate votes are now likely to start about 10 minutes 
later at 10:40 a.m. This may just work, the answer to a prayer.
    I am going to ask our witnesses to come on up and have a 
seat at the table. The first panel is comprised of State 
witnesses representing the States of Illinois, New Jersey and 
Texas. We appreciate their willingness to appear before us 
today. I ask each of you to take maybe 5 minutes for your 
statements. I understand that Ms. Jackson from New Jersey 
cannot be here. Talk about hotspots.
    Who is here from New Jersey? Come on up and join us and 
maybe you will be willing to answer some questions. I 
understand your name is Alyssa Wolfe, and you are a counselor 
to the Commissioner for the Department of Environmental 
Protection. I understand there is a forest fire or something 
that was created by a fire that an aircraft dropped. So New 
Jersey knows first hand about hotspots today, but we are 
grateful, and there is a spot for you to sit right here.
    I spent most of the morning pronouncing Mr. Schanbacher's 
name. I think I have it right. Let's see here. Ms. Wolfe is 
here to respond to questions. She will not be giving the 
statement on behalf of the Commissioner. So we are going to 
just ask you to go ahead and lead us off. We are grateful that 
you are here, all the way from Texas, Austin, and know a thing 
or two about these issues. We appreciate your being here on 
behalf of your State.
    We look forward to Mr. Scott, who has come to us all the 
way from Illinois. I believe he is a fighting Illini. We have a 
couple of Buckeyes up here, and we always welcome our friends 
from Illinois. I am interested to hear what you are doing there 
in your State to address mercury, and especially how you got 
the utilities to buy into this. That will be an interesting 
discussion, I am sure.
    Mr. Schanbacher, you are on. Thanks.

     STATEMENT OF DAVID SCHANBACHER, CHIEF ENGINEER, TEXAS 
              COMMISSION ON ENVIRONMENTAL QUALITY

    Mr. Schanbacher. Thank you very much.
    I am David Schanbacher, the chief engineer of the Texas 
Commission on Environmental Quality. Thank you, Chairman Carper 
and Ranking Member Voinovich for asking me to speak to you this 
morning.
    I have been working on environmental issues for over 15 
years, and the transport and fate of mercury is one of the most 
complicated air pollutions that I have ever studied. We know a 
lot about the health effects of mercury thanks to extensive 
studies conducted outside of the United States. These studies 
looked at the children of women whose diet is comprised largely 
of fish. Fish consumption is the primary source of human 
mercury exposure.
    These studies determined the mercury level in the mother's 
blood associated with the development of subtle neurological 
effects in their children. The EPA set a reference dose 10 
times lower than the levels at which these subtle health 
effects were seen. Although the EPA reference dose is very 
conservative and health effects are not expected, we like to 
maintain a large margin of safety for our citizens.
    Thanks to extensive sampling by the Centers for Disease 
Control, we also have a very good idea of the U.S. population's 
exposure to mercury. Our review of the 2000-2001 CDC data 
indicates that only 2.5 percent of women of childbearing age 
have blood mercury levels greater than the EPA reference dose, 
and none of these women have blood mercury levels where any 
adverse effects are to be expected.
    We also have a Texas study with similar results. The Texas 
Department of State Health Services looked specifically at a 
group of people who live near and consume fish from Caddo Lake, 
which has a fish consumption advisory for mercury. They found 
that the blood mercury levels did increase with increasing fish 
consumption, but these levels were all well below those 
expected to cause adverse effects.
    At TCEQ, we look closely at all new information to make 
sure we are working with the best possible science. For 
example, a recent Texas study looked at mercury emissions and 
autism. This study reported an association between proximity to 
mercury emissions and special education rates. However, it 
could not establish that mercury causes autism, and in fact two 
recent case control studies indicated no causal relationship 
between mercury and autism.
    The amount of mercury in fish is determined by many 
different factors and varies regionally. Especially important 
is the chemistry of the water body where mercury is deposited. 
Factors such as pH, sulfate, and oxygen influence the rate at 
which divalent mercury is converted into methylmercury, the 
form that accumulates in fish. Whether or not a water body has 
a fish consumption advisory is more dependent on lake chemistry 
than proximity to a mercury emissions source.
    One major concern we have regarding a national standard for 
mercury control is the regional difference in the coal-types 
used in U.S. powerplants. Bituminous coal is used primarily in 
eastern States, while western States rely more on sub-
bituminous coal and lignite. The coal type affects the amount 
and form of mercury released and the form of mercury is very 
important in determining deposition rates and the subsequent 
bio-accumulation of methylmercury in fish.
    Now, divalent or reactive mercury is the form that is most 
likely to deposit locally and that is most easily converted to 
methylmercury in the water body. Fortunately, divalent mercury 
is also the easiest to remove from powerplant emissions. Plants 
that burn bituminous coal emit primarily divalent mercury. This 
means that mercury is most easily controlled at plants in the 
eastern United States.
    Sub-bituminous coal and lignite, on the other hand, emit 
primarily elemental mercury, which is much more difficult to 
control because it is not water soluble and passes through most 
control devices.
    However, elemental mercury is not deposited locally, but 
rather enters the global mercury pool where it is stable and 
can remain in the atmosphere from 6 months to 2 years.
    We believe that the EPA's Clean Air Mercury Rule contains 
several important features that should be retained. It 
regulates powerplant mercury emissions based on the type of 
coal burned and as such the form of mercury emitted. Phase one 
of the mercury rule is set at levels that will likely force 
plants to control the more important divalent mercury. The cap 
and trade program creates a financial incentive for plants to 
remove more mercury than required. By deferring the removal of 
less important elemental mercury until 2018, industry has time 
to develop cost effective and safe mercury control technology.
    I also have some concerns with requiring mercury emissions 
reductions on a more stringent schedule. Additional testing of 
the control technology is required to determine long-term 
reductions and the potential effects on unit performance. 
Activated carbon may change fly ash properties and may render 
it unusable in concrete, resulting in large volumes of ash to 
be landfilled, rather than reused. Many mercury-specific 
controls are designed to convert elemental mercury, which does 
not deposit locally, into divalent mercury which does. Control 
requirements that outpace technology could ironically increase 
local mercury deposition.
    The EPA fish tissue modeling shows very little, if any, 
benefit from phase two, because phase two addresses elemental 
mercury, which does not deposit locally. Finally, mercury 
control requirements that outpace technology could adversely 
impact the Nation's supply of affordable and reliable 
electricity, and cause a shift away from one of our most 
abundant domestic energy sources.
    Thank you very much.
    [The prepared statement of Mr. Schanbacher follows:]

    Statement of David C. Schanbacher, P.E., Chief Engineer, Texas 
                  Commission on Environmental Quality

    Mercury is toxic to the nervous system and potentially associated 
with cardiovascular disease; however, blood mercury levels in the 
United States are below levels shown to cause adverse health effects. 
The U.S. EPA has developed a Reference Dose based on subtle 
neurological effects seen in children whose mothers consume higher than 
average amounts of fish. This level of 0.3 mg methylmercury/kg whole 
fish is 10 times lower than the levels at which effects were actually 
seen. The Reference Dose is set to protect against adverse effects from 
daily exposure in sensitive groups. Our review of the 2000-2001 
National Health and Nutrition Examination Survey indicates that only 
2.5 percent of women of child-bearing age had blood mercury levels 
greater than the Reference Dose. None of these women had blood mercury 
levels above doses where adverse effects were seen. Although these 
values are conservative and health effects are not expected to occur, 
we would like to maintain conservative levels of mercury in the blood 
of our citizens. As such, we advise people to limit their consumption 
of fish that exceed conservative screening values. The Texas Department 
of State Health Services looked specifically at a group of people who 
live near and consume fish from Caddo Lake, which has a fish-
consumption advisory for mercury. They found that blood mercury levels 
did increase with increasing fish consumption, but these levels were 
all well below levels expected to cause adverse effects. All women of 
child-bearing age in this study had blood mercury levels below the EPA 
Reference Dose.
    A recent study in Texas raised concerns about the association of 
mercury and autism. This study reported an association between mercury 
emissions and special education rates; however, it cannot establish 
that mercury causes autism. In fact, two recent case-control studies 
indicate no causal relationship between mercury and autism.
    Fish consumption is the primary source of methylmercury exposure 
for humans; however, the amount of mercury in fish is determined by 
many different factors and varies regionally. These factors include the 
pH, dissolved organic carbon, sulfate, and oxygen content of the water 
body where divalent mercury is deposited. These factors influence the 
rate at which bacteria convert divalent mercury into methylmercury, 
which is the form that accumulates in fish.
    Regional differences also exist in the types of coal used to fuel 
powerplants in the United States. The type of coal burned also affects 
the amount and form of mercury released. The form of mercury released 
is very important in determining deposition rates and subsequent 
bioaccumulation of methylmercury in fish. Bituminous coal is primarily 
used in the eastern United States, while western states rely more on 
sub-bituminous coal and lignite, especially in Texas. Bituminous coal, 
when burned, emits primarily divalent, or reactive, mercury. Sub-
bituminous coal and lignite, on the other hand, emit primarily 
elemental mercury.
    Divalent mercury settles out readily from the atmosphere through 
wet and dry deposition and as such, is subject to local deposition. 
Elemental mercury, the primary form of mercury emitted from sub-
bituminous coal and lignite, is not deposited locally, but rather 
enters the global pool of mercury, where it is stable and can remain in 
the atmosphere between six months and two years.
    The United States Environmental Protection Agency Clean Air Mercury 
Rule (CAMR) appropriately regulates mercury emissions from powerplants 
based on the type of coal burned and as such, the form of mercury 
emitted. The Phase I CAMR rule relies on co-benefits of the Clean Air 
Interstate Rule or CAIR. CAIR controls to reduce nitrogen oxide (NOx) 
and sulfur dioxide (SO2), such as scrubbers, are also very 
effective in controlling divalent mercury, the form of mercury 
primarily emitted from bituminous coal and subject to local deposition. 
Texas electric generating units are subject to some of the most 
stringent requirements in the nation for NOx and SO2.
    EPA's Phase II CAMR controls will rely on mercury-specific control 
technologies that address control of elemental mercury. Mercury-
specific technologies are in various stages of development. Additional 
testing is required to determine long-term reductions, potential 
effects on unit performance, and fly ash contamination for the types of 
coal burned in Texas. Current research has shown that abatement devices 
do not work equally as well for all boilers. Elemental mercury, 
specifically from lignite and sub-bituminous coal, can be especially 
difficult to control, because elemental mercury is not very water-
soluble and passes through most abatement devices. Mercury efficiency 
removal rates for lignite have been recorded anywhere from 0 to 75 
percent depending on the control technology. Lack of full-scale and 
long-term testing data for all mercury-specific control devices, 
particularly for lignite-fired boilers, is an important concern for 
Texas. For example, substantial data for activated carbon in municipal 
solid waste combustors exists, but these systems, with typically lower 
flue gas temperatures, are not as complex as utility boilers. Results 
from activated carbon injection from utility boilers vary, even on 
systems with similar design. With regard to fly ash contamination, 
standard sorbents may change the properties of the fly ash and may 
render it unusable in concrete, potentially resulting in large volumes 
of ash to be landfilled rather than put into beneficial reuse. Although 
mercury controls will be available for use on some scale prior to 2018, 
EPA and Texas do not believe they can be installed and operated on a 
national scale prior to that date. The potential availability and 
reliability of these controls provides justification for CAMR Phase II 
to begin in 2018 and Texas agrees. It is somewhat ironic that most of 
the mercury-specific controls are designed to convert elemental 
mercury, which is not subject to local deposition, into divalent 
mercury, which is. Lastly, EPA modeling of mercury fish tissue 
concentrations as a result of both CAIR and CAMR controls shows very 
little, if any, impact of CAMR Phase II over the CAIR controls. This 
result is expected since CAMR Phase II addresses elemental mercury 
which is not subject to local deposition.
    There are three main interconnected networks or power grids that 
comprise the electric power system in the continental United States: 
the Eastern Interconnect, the Western Interconnect, and the Texas 
Interconnect. The Texas Interconnect is not connected with the other 
networks, except through certain direct current interconnection 
facilities. Limited portions of Texas do fall into the other two 
interconnects, however the Electric Reliability Council of Texas 
(ERCOT) manages the flow of electric power in the Texas Interconnect to 
approximately 20 million Texas customers--representing 85 percent of 
the state's electric load and 75 percent of the Texas land area. As the 
independent system operator for the region, ERCOT schedules power on an 
electric grid that connects 38,000 miles of transmission lines and more 
than 500 generation units. In August 2005, ERCOT recorded a new system 
peak demand of 60,274 megawatts (MW) surpassing the previous record of 
60,095 MW set in 2003. With Texas' continued growth, reliable power is 
essential.
    Texas currently has 17 coal-fired electric generating utilities 
(EGUs) that have 36 boilers that are covered by the Clean Air Mercury 
Rule (CAMR). Of the 36 boilers, 15 are lignite (8200 megawatt 
electrical (MWe)); 20 are subbituminous (8102 MWe); and one uses 
bituminous coal (600 MWe). In 2003, 39 percent of the power in Texas 
was generated by coal (49 percent natural gas, 9 percent nuclear and 
1.2 percent renewable). Texas committed to participating in the CAMR 
cap-and-trade program by adopting the federal rule by reference in July 
2006. For CAMR Phase I beginning in 2010 through 2017, the EPA is 
relying on reductions as a ``co-benefit'' of NOx and SO2 
controls from the Clean Air Interstate Rule (CAIR) to assist EGUs in 
meeting the Phase I requirements of CAMR budgets. CAMR Phase II begins 
in 2018 and additional controls may be necessary for EGUs to meet their 
mercury allowance caps.

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    Senator Carper. Mr. Schanbacher, thank you very much, and 
thanks again for joining us. We look forward to asking you a 
couple of questions here in a few minutes.
    Mr. Scott, again welcome. Commissioner Jackson is not here, 
and Ms. Wolfe is not here to give her statement, but she will 
be here to answer all the tough questions that Senator 
Voinovich and I are going to ask.
    I am going to ask unanimous consent that Commissioner 
Jackson's statement be made a part of the record. Without 
objection, it will be.
    [The referenced document follows on page 156.]
    Senator Carper. The same will be true for each of our other 
witnesses. We will make your entire statement part of the 
record, unless there are objections.
    Hearing none, Mr. Scott, you are recognized. Thank you.

STATEMENT OF DOUGLAS P. SCOTT, DIRECTOR, ILLINOIS ENVIRONMENTAL 
                       PROTECTION AGENCY

    Mr. Scott. Thank you very much, Chairman Carper and Senator 
Voinovich. My name is Doug Scott. I am the director of the 
Illinois Environmental Protection Agency. On behalf of Governor 
Rod Blagojevich, I want to thank you and the committee members 
for this opportunity to testify on Illinois' recently adopted 
regulations to control mercury emissions from the State's coal-
fired powerplants that also successfully implemented a multi-
pollutant strategy to achieve substantial reductions in 
nitrogen oxide and sulfur dioxide.
    I believe our experience has shown that significant mercury 
reductions beyond those contained in the Federal Clean Air 
Mercury Rule can be achieved with available technology and at a 
reasonable cost, while providing substantial benefits to public 
health.
    Like other States, Illinois felt strongly that the Federal 
rule was inadequate in protecting public health. Like Senator 
Collins, I come from a State where we have a fish advisory on 
all waters of the State for all predator fish.
    Senator Carper. I guess that will knock out New Jersey for 
us for our family vacation, too.
    [Laughter.]
    Mr. Scott. We thought that the Federal rule was too slow in 
terms of when the restrictions came in; required too little 
reduction. We had strong objection to the trading of the 
neurotoxin, which may leave Illinois and other States with no 
substantial reductions.
    But as a result of negotiations with the major coal-fired 
powerplant operators, we were able to reach agreements that 
will result not only in significantly exceeding the mercury 
reductions that would have occurred under CAMR, but also 
achieve reductions in NOx and SO2 that go beyond the 
Federal clean air interstate rule requirements.
    Illinois has been aggressive in other mercury legislation 
as well. There is still an issue in terms of collection of 
materials that contain mercury. There is still an issue in 
terms of where that material goes. I know Senator Obama from 
our State and Senator Murkowski have legislation to address 
that, that we are very interested in. But with respect to 
powerplants, the written testimony that I have filed with the 
subcommittee details the qualifications and conclusions of the 
group of respected experts on regulatory, technical controls, 
economic and health issues relative to mercury reductions from 
powerplants that assisted us.
    Their work and that of our own EPA Bureau of Air staff 
created a strong case for the Governor's plan to reduce mercury 
emissions from Illinois coal-fired powerplants by 90 percent 
beginning in mid-2009. Illinois obtains more than 40 percent of 
its electricity from 21 coal-fired powerplants, and we sit on 
top of 38 billion tons of coal, giving us the third largest 
coal reserves in the Nation.
    Coal-fired powerplants in Illinois constitute the largest 
source of manmade emissions of mercury and sulfur dioxide, and 
one of the largest sources of nitrogen oxide. After nearly a 
full year of stakeholder meetings and contested public 
hearings, rulemaking procedures, and lengthy negotiations, the 
Illinois mercury rule was unanimously approved, both by our 
Pollution Control Board and by our Joint Legislative Committee 
on Administrative Rules, and the rule became effective on 
December 21 of last year.
    The special significance was that the introduction of the 
Illinois mercury rule became the catalyst for the State to 
reach landmark environmentally beneficial agreements with the 
three largest coal-fired powerplant systems operating in 
Illinois: Midwest Generation, Ameren, and Dynegy. These three 
companies represent 88 percent of Illinois' coal-fired electric 
generating capacity, and account for hundreds of thousands of 
tons of air emissions each year.
    After the Illinois EPA presented its findings in support of 
the mercury rule during 2 weeks of public hearings that were 
well attended and full of lively debate, the Illinois EPA was 
approached by one of the power companies who expressed a desire 
to work toward common goals on a multi-pollutant solution. As a 
result of long hours of negotiation, an alternative standard 
was proposed that allowed some limited flexibility in complying 
with the mercury standards in exchange for commitments to also 
significantly reduce SO2 and NOx.
    This initial agreement led to similar discussions and 
similar agreements with Illinois' other two large coal-burning 
powerplant owners. The outcome is a critical milestone in 
reducing air pollution and one of the most important 
environmental and public health advances in Illinois history. 
It represents the largest reduction in air emissions ever 
agreed to by individual companies in Illinois under any 
context, whether through an enforcement action or through a 
regulation.
    The mercury reductions obtained from Illinois' rule will 
substantially be greater than those under Federal CAMR, and 
will occur more quickly. Whereas the Clean Air Mercury Rule 
would cap Illinois' annual mercury emissions at 3,188 pounds by 
2010 through 2017, the Illinois rule results in annual mercury 
emissions of only around 770 pounds beginning in 2009.
    Overall, under CAMR, coal-fired power producers in Illinois 
would have only been required to reduce their mercury emissions 
by 47 percent in 2010 and 78 percent by 2018, not the 90 
percent reduction by 2009 required in the Illinois rule. In 
addition, trading mercury allowances is not permitted under the 
Illinois rule to prevent the hotspots that we have already 
heard about this morning, and to assure that reductions 
actually occur in Illinois, in contrast to the cap and trade 
program under CAMR.
    Coal-fired powerplant operators covered by the negotiated 
multi-pollutants standards must also comply with Federal CAIR, 
the combined impact will be reductions of SO2 and 
NOx that will far exceed those required under CAIR alone. Under 
the proposed CAIR, U.S. EPA estimates that coal-fired power 
producers in Illinois would have been required to reduce their 
SO2 emissions by 34 percent overall by 2019. Under 
the agreement that we reached with Midwest Generation, the 
largest coal-fired power generator in Illinois, by 2019 an 
estimated 80 percent reduction in SO2 will occur.
    Under the multi-pollutant solution, Ameren will be required 
to reduce emissions of SO2 by 76 percent by 2015 and 
Dynegy will be required to reduce emissions by 65 percent by 
2015. We project the total emission cuts from all three power 
companies that will result from a combined CAIR and multi-
pollutant solution rule, comparing a baseline in the 2003 and 
2005 period with 2019, the reduction will be over 233,000 tons 
per year of reduction in SO2 and over 61,000 tons 
per year reduction of NOx.
    They also substantially restrict trading of SO2 
and NOx allowances to assure that the reductions actually occur 
at the Illinois plants, which is not only good for our 
citizens, but good for the folks that are to the northeast of 
us as well. Some mercury emission reductions----
    Senator Carper. Mr. Scott, given the fact that votes are 
just starting, I am going to ask you to go ahead and wrap it 
up, if you will.
    Mr. Scott. Absolutely.
    Senator Carper. So we will have a chance to try to ask the 
questions of this panel, to excuse this panel, and we will rush 
off to make our votes. So if you could just wrap it up, please.
    Mr. Scott. Certainly, thank you, Senator.
    Flexibility for mercury control was provided in the form of 
relief of timing of demonstrating compliance with the 90 
percent reduction standard, which we believe is the key to 
this. It gives the companies some flexibility and some 
certainty as they not only comply with the mercury rule, but 
with other legislation to come. We believe that that is one of 
the reasons why they willingly entered into these agreements 
with us.
    The result for citizens in Illinois, and we think citizens 
of other States, will be significant public health benefits, 
while still assuring affordable and reliable energy.
    Thank you very much.
    [The prepared statement of Mr. Scott follows:]

    Statement of Douglas P. Scott, Director, Illinois Environmental 
                           Protection Agency

    Mr. Chairman and Members of the Committee: My name is Doug Scott 
and I am the Director of the Illinois Environmental Protection Agency. 
I want to thank Senator Carper and the other members of the Senate 
Subcommittee on Clean Air and Nuclear Safety for this opportunity to 
testify on Illinois' recently adopted regulations to control mercury 
emissions from the State's coal-fired powerplants.
    I received a Bachelor's Degree with honors from the University of 
Tulsa in 1982, and received a graduate Juris Doctor law degree with 
honors from Marquette University in 1985. I served as Assistant City 
Attorney and City Attorney for the City of Rockford, Illinois from 1985 
to 1995. I also represented the City on a number of environmental 
issues. From 1995-2001 I served as an Illinois State Representative for 
the 67th District and served on the House Energy and Environment 
Committee, and was a member of the committee that rewrote the States' 
electric utility laws. I was elected to the Office of the Mayor of 
Rockford in April 2001 and served a four-year term and served as 
President of the Illinois Chapter of the National Brownfields 
Association. I was appointed as the Director of the Illinois EPA by 
Governor Rod Blagojevich in July 2005.
    I am pleased to be here to provide testimony on behalf of Illinois 
Governor Rod Blagojevich and the Illinois EPA regarding Illinois' 
mercury rule and the associated agreements we reached with the State's 
three largest coal-fired powerplant system owners. My testimony will 
provide background information and a broad overview of the development 
of Illinois' mercury rule and the related multi-pollutant reduction 
agreements. I will address some of the measures the Illinois EPA took 
during rule development to ensure that we relied on accurate and 
current information as we crafted the rule.

                              INTRODUCTION

    Illinois is a large industrial state with a population of around 13 
million and a gross state product of $522 billion, both of which are 
approximately four percent of the U.S. total and ranks Illinois as 
fifth among the 50 states in these categories. Illinois obtains more 
than 40 percent of its electricity from coal-fired powerplants and sits 
on top of 38 billion tons of coal, giving it the third largest coal 
reserves in the nation. Coal-fired powerplants in Illinois constitute 
the largest source of man-made emissions of mercury and sulfur dioxide 
(SO2), and one of the largest sources of nitrogen oxides 
(NOx).
    On January 5, 2006, Illinois Governor Rod Blagojevich announced an 
aggressive proposal to reduce mercury emissions from Illinois coal-
fired powerplants by 90 percent beginning mid 2009. After nearly a full 
year of stakeholder meetings, contested public hearings, rulemaking 
procedural processes, and lengthy negotiations, the Illinois mercury 
rule was unanimously approved by both the Illinois Pollution Control 
Board (Board) and the Joint Committee on Administrative Rules (JCAR), 
the two governing oversight bodies for regulations in Illinois. The 
Illinois mercury rule became effective on December 21, 2006. This rule 
requires coal-fired powerplants in Illinois to achieve greater 
reductions of mercury and achieve these reductions more quickly than 
that proposed in May 2005 by the U.S. EPA under the federal Clean Air 
Mercury Rule (CAMR). Illinois is not alone in seeking to go beyond the 
federal CAMR. Other states have made similar decisions. Numerous states 
have adopted mercury reduction programs that ``go beyond'' CAMR in 
their reduction target or timeframe for obtaining reductions, and a 
number of other states have announced their intentions to do so as 
well.
    Of special significance for Illinois was that the Illinois mercury 
rule became the catalyst for the State to reach landmark, 
environmentally-beneficial agreements with the three largest coal-fired 
powerplant systems operating in Illinois: Midwest Generation, Ameren, 
and Dynegy. These three companies represent 88 percent of Illinois' 
17,007 Megawatts of coal-fired electric generating capacity and account 
for hundreds of thousands of tons of air emissions each year.
    After the Illinois EPA presented its findings in support of the 
mercury rule during two weeks of public hearings that were well 
attended and full of lively debate, the Illinois EPA was approached by 
one of the power companies that expressed a desire to work toward 
common goals. As a result of long hours of negotiation, an alternative 
standard was proposed that allowed some limited flexibility in 
complying with the mercury standards in exchange for commitments to 
also significantly reduce SO2 and NOx emissions from the 
company's coal-fired powerplants. This initial agreement led to similar 
discussions and agreements with Illinois' other two large coal-burning 
plant owners.
    The agreements reached and memorialized in the Multi-Pollutant 
Standard (MPS) and Combined Pollutant Standard (CPS) are significant 
not only for the magnitude of emissions reductions that occur, but also 
for the mercury rule support that accompanied the agreements. The 
Illinois mercury rule was initially vehemently opposed by a unified 
coal-fired power industry. The first agreement established that mutual 
goals were achievable, set the guiding principles, and opened the door 
for other companies to follow. Ultimately, the success of the Illinois 
mercury rule, and in particular the final unanimous approval of the 
rule, can be widely attributed to the removal of significant opposition 
and reciprocating support that occurred due to these agreements.
    These multi-pollutant reduction agreements are expected to result 
in measurable improvements to Illinois and regional air quality by 
dramatically reducing mercury, SO2, and NOx emissions. The 
agreed to measures are a critical milestone in reducing air pollution 
and one of the most important environmental and public health advances 
in Illinois or this nation's history. They represent the largest 
reductions in air emissions ever agreed to by individual companies in 
Illinois under any context, whether through an enforcement action or 
regulation.
    The coal-fired powerplant operators covered by MPS and CPS must 
also fully comply with the federal Clean Air Interstate Rule (CAIR) and 
the combined impact will be reductions of SO2 and NOx that 
will far exceed those required under CAIR alone. Under the proposed 
CAIR, U.S. EPA estimates that coal-fired power producers in Illinois 
would have been required to reduce their SO2 missions by 34 
percent overall, by 2019. Under the CPS, Midwest Generation, the 
largest coal-fired power generator in Illinois, will have an estimated 
reduction of 80 percent by 2019 in SO2. In terms of the 
emission rate, it would have been an estimated 0.45 pounds per million 
Btu by 2019 under CAIR only, compared to 0.11 pounds per million Btu 
with CPS. Under MPS, Ameren will be required to reduce emissions of 
SO2 by 76 percent by 2015 and Dynegy will be required to 
reduce emissions by 65 percent by 2015.
    For NOx, the reduction would be a projected 55 percent for all of 
the coal-fired powerplants in Illinois under CAIR only compared to 62 
percent for Midwest Generation under CPS, 52 percent for Ameren and 48 
percent for Dynegy under MPS.
    The Illinois EPA estimates the total emission cuts from all three 
power companies that will result from the combined CAIR, CPS and MPS 
rules, comparing a baseline in the 2003-2005 period and 2019, will be 
233,600 tons per year reduction for SO2 and 61,434 tons per 
year reduction for NOx.
    Just as trading to prevent ``hotspots'' was prohibited in the 
mercury rule, in order to receive the maximum benefit in Illinois air 
quality and to prevent contributions to interstate pollution transport, 
the CPS and MPS rules also substantially restrict trading of 
SO2 and NOx allowances. For Midwest Generation, under the 
CPS, the allowances can only be initially traded to the company's own 
generation station in Homer City, Pennsylvania and thereafter only 
outside Ohio, Indiana, Illinois, Wisconsin, Michigan, Kentucky, 
Missouri, Iowa, Minnesota, and Texas--all of which are states that have 
been shown to contribute to pollution in Illinois. For Ameren and 
Dynegy, there are no restrictions on the trading of allowances 
interstate amongst their own units, however, they can only interstate 
trade any additional allowances that occur as a result of controlling 
emissions beyond the levels required by the MPS. This provides an 
incentive for these companies to reduce emissions to the greatest 
extent possible instead of seeking only to control emissions to the 
exact level of the MPS numeric emission limits. In addition, Midwest 
Generation, Ameren and Dynegy cannot purchase allowances to assist in 
meeting the MPS or CPS emission standards.

                  ILLINOIS MERCURY RULEMAKING PROCESS

    The mercury rulemaking process in Illinois began long before 2006 
with Illinois providing comments on federal mercury control proposals 
and indicating to our coal-fired power industry that the State was 
looking to control mercury emissions to the greatest extent reasonably 
possible in consideration of technical and economic issues.
    Illinois Governor's Rod Blagojevich's January 2006 announcement on 
mercury control set the rule development process into high gear. The 
Illinois EPA began to hold stakeholder meetings later that very month 
and proposed a draft rule to the Board in March of 2006.
    Illinois recognized early on that it needed to obtain the highest 
quality information on the controversial subject of mercury control. We 
sought out and retained nationally recognized experts on different 
topics regarding mercury. These experts were utilized to assist the 
Illinois EPA in rule development and testimony before the Board. 
Experts were retained that included: Dr. James Staudt, PhD, Andover 
Technology Partners, on mercury controls and associated costs; Dr. 
Gerald Keeler, PhD, Professor, University of Michigan, on mercury 
deposition and local impacts; Dr. Deborah Rice, PhD, Toxicologist, on 
health effects; ICF Consulting Inc. and Synapse Energy Economics, on 
regulatory economic impacts; Dick Ayres, Principal, Ayres Law Group, on 
regulatory issues surrounding mercury control.
    The Illinois EPA performed significant outreach to stakeholders on 
the rule, including the aforementioned stakeholder outreach meetings in 
early 2006 where we presented information on our findings, updated 
stakeholders on the rule, requested feedback on issues, and held 
question and answer sessions. We also provided regular mail and e-mail 
addresses to allow interested parties to submit comments and questions 
that were then answered at the stakeholder meetings. In addition, we 
repeatedly offered to meet with any stakeholders in smaller groups to 
discuss the rule and related issues, and, in fact, held many such 
meetings.
    The rule was the subject of much controversy from the outset. 
Illinois' coal-fired powerplants united in opposition and several court 
proceedings followed the initial filing of the rule. Nevertheless, the 
mercury proposal continued to progress through the rulemaking process. 
As is normal for any controversial rulemaking, the Board scheduled 
public hearings with the initial round of hearings designated for the 
Illinois EPA to present its case on why the rule should be adopted.
    The proposed mercury rule received support from the State's 
environmental groups and an alliance of opposition from the State's 
coal-fired powerplant owners. The first round of hearings lasted a full 
two weeks and we believe the Illinois EPA and its experts built a 
strong case for stringent mercury control before the Board, 
facilitating the subsequent negotiations with the powerplant systems on 
alternative multi-pollutant regulatory approaches.
    The second round of hearings was designed for the coal-fired 
powerplant representatives to present their findings to the Board on 
why they believed the rule was flawed. The beginning of these hearings 
witnessed the introduction of a joint filing by the Illinois EPA and 
one of the power companies on the agreement reached whereby the company 
would withdraw all opposition to the proposed mercury rule based on an 
amendment to the rule that contained an agreed upon multi-pollutant 
standard. This set the stage for other agreements to subsequently be 
reached, although the last agreement was not finalized until after the 
second round of hearings ended and only shortly before the rule was 
approved by JCAR.
    The crux of the multi-pollutant agreements lies in the mutual 
benefits of multi-pollutant standards for controlling the emissions of 
mercury, SO2, and NOx from coal-fired powerplants. Such 
benefits include an increase in the protection of public health and the 
environment by achieving greater reductions, reducing pollution more 
cost-effectively, and offering greater certainty to both industry and 
regulators. Since mercury emission reductions can be obtained as a co-
benefit from the control devices used to reduce SO2 and NOx, 
it makes sense to allow companies the option to synchronize the control 
of these pollutants, provided that public health and the environment 
are also positively impacted. Flexibility for mercury control in the 
MPS and CPS was provided in the form of relief in the timing of 
demonstrating compliance with a 90 percent reduction standard, with the 
final goal of achieving even greater reductions. In essence, under the 
MPS and CPS, companies are required to install mercury controls on the 
vast majority of their units no later than mid-2009 as required in the 
primary mercury standard. However, actual compliance with the 90 
percent standard is not required to be demonstrated until 2015 for 
those units that are unable to achieve this level of reduction. In 
providing more time to reach compliance with the 90 percent mercury 
standard, emission controls that target SO2 and NOx, and 
that achieve mercury reductions as a co-benefit, can be installed and 
thereafter be used to further reduce mercury to the desired level. It 
is anticipated that companies will install a multitude of pollution 
control equipment costing billions of dollars on their units, including 
scrubbers for SO2, selective catalytic reduction and non-
selective catalytic reduction units for NOx, and particulate matter 
control equipment, such as electrostatic precipitators and fabric 
filters.
    In recognition of the high level of SO2 and NOx control 
that result from companies meeting the agreed standards of the MPS and 
CPS, the Illinois EPA pledged to look first at other sources than those 
complying with the MPS and CPS in Illinois for future reductions in 
these pollutants for purposes of meeting the State's air quality goals.
    The Illinois mercury rulemaking process culminated with the 
adoption of the rule with an effective date of December 21, 2006.

                    MERCURY BACKGROUND AND CONCERNS

    Mercury is a persistent, bioaccumulative neurotoxin that presents a 
serious threat to the health and welfare to the citizens of Illinois 
and nationwide. Mercury as a pollutant is of particular concern to 
Illinois due to our large fleet of coal-fired powerplants. Mercury is 
contained in small amounts in all forms of coal that are burned at 
Illinois powerplants. The combustion of coal at powerplants represents 
the largest source category of anthropogenic mercury emissions in 
Illinois, and for that matter, in the United States. As the coal is 
burned in a boiler at a powerplant, the mercury is released into the 
exhaust flue stream and travels through existing ductwork and control 
devices until it is finally emitted through a stack into the 
atmosphere.
    Mercury is released into the atmosphere from anthropogenic emission 
sources such as coal-fired powerplants as either a gas or attached to 
minute solid particles. These emissions can contaminate the environment 
both locally near the point of release and many miles away. Mercury 
emissions in the air are transferred to the earth's surface via wet or 
dry deposition processes. The wet forms can fall to earth as rain, 
snow, or fog while the dry forms are particulates.
    Mercury that is directly deposited or finds its way into the 
aquatic systems transforms into methylmercury through a series of 
chemical reactions involving microbial activity. Methylmercury is toxic 
and is the most common organic form of mercury found in the 
environment. It is very soluble and bioaccumulates within the tissues 
of wildlife (fish, aquatic invertebrates, mammals) as well as humans. 
Bioaccumulation occurs when an organism's rate of uptake of a substance 
exceeds its rate of elimination. Fish become contaminated as they feed 
on contaminated food sources such as plankton or smaller fish. Humans 
are contaminated as a result of eating contaminated fish.
    A key concept in understanding the need and methods for mercury 
control is that, although mercury air emissions are the target for 
reductions, the ultimate goal is to reduce methylmercury levels in 
water bodies, and hence, fish tissue.
    The Illinois EPA retained the services of Dr. Gerald Keeler to 
assist us with understanding mercury deposition and to provide 
technical information on deposition issues. Dr. Keeler is a recognized 
leader in the field of mercury deposition and has conducted state-of-
the-art research on the relationship of mercury emissions, local 
impacts, and coal-fired powerplants.

              ILLINOIS COAL-FIRED POWERPLANTS AND MERCURY

    Today, more than 40 percent of Illinois' electricity comes from 
coal-fired powerplants. Illinois is home to 21 coal-fired powerplants 
that are affected by the Illinois mercury rule, most of which are over 
25 years old. There are a total of 59 electric generating units 
operating at these 21 plants. These coal-fired powerplants emitted an 
estimated 7,022 pounds per year of mercury into the atmosphere in 2002. 
We estimate that these powerplants make up around 71 percent of 
Illinois' man-made mercury emissions. The State's fleet of powerplants 
are scattered throughout Illinois, with many located near major bodies 
of water.
    Mercury emissions from coal-fired powerplants can have both local 
and downwind environmental impacts and Dr. Keeler assisted the Illinois 
EPA in understanding the potential for local impacts from powerplants. 
Illinois EPA believes that the reduction in mercury emissions required 
by the rule will result in significant reductions of mercury deposition 
and methylmercury levels in Illinois waters and fish. This belief is 
reinforced by actual measured reductions in methylmercury fish tissue 
contents in Florida and Massachusetts that directly coincide with 
measures taken to reduce mercury emissions from nearby sources.
    Because mercury is of such a significant concern to human health 
and the environment, Illinois has adopted legislation and/or 
implemented a number of programs to reduce mercury emissions to the 
environment from sources other than coal-fired powerplants. Illinois' 
coal-fired powerplants constitute the largest source of uncontrolled 
mercury emissions in the State.

                   MERCURY CONTAMINATION IN ILLINOIS

    Fish consumption advisories are issued when concentrations above 
human health-based limits of one or more of contaminants such as 
polychlorinated biphenyls (PCBs), chlordane, and mercury are detected 
in fish tissue. One of the most profound statements regarding the 
status of mercury contamination in Illinois is that there is a 
statewide advisory for predator fish in Illinois waters due to 
methylmercury. Fish consumption use is associated with all waterbodies 
in the State and therefore it is commonly stated that all waterbodies 
in the State have a fish consumption advisory in place for mercury. 
According to the latest (2004) Illinois list of impaired waters, there 
are 61 river segments (1,034 miles) and 8 lakes (6,264 acres) that have 
mercury listed as a potential cause of impairment due to restrictions 
on fish consumption.
    Our review of fish consumption literature provides convincing 
evidence that sport anglers currently consume amounts of sport-caught 
fish that could cause them and their families to exceed health-based 
limits for mercury contamination. The literature regarding anglers' 
consumption of their catch strongly suggests that a subset of these 
anglers have meal frequencies that exceed the state-wide fish 
consumption advisory for mercury, putting them well above the 
recommended rates for even fairly low levels of contamination.
    The Illinois EPA retained the services of Dr. Deborah Rice, a 
toxicologist with a background in the health effects of mercury, to 
assist us with understanding the human health effects of mercury and to 
provide technical information on such effects.
  mercury control in illinois--identifying the need to go beyond camr
    After earlier activities to determine how best to regulate mercury, 
on January 30, 2004, U.S. EPA published a notice of proposed rulemaking 
setting forth three alternative regulatory approaches to reducing 
emissions of mercury from coal-fired powerplants. In two of the three 
alternatives, U.S. EPA proposed to rescind its regulatory finding, 
which would require Maximum Achievable Control Technology (MACT) level 
control of mercury emissions, and instead impose statewide mercury 
emissions budgets to regulate powerplants that could be met through a 
cap and trade program, namely the CAMR.
    In response to the proposed rule, the Illinois EPA submitted 
comments, making the following key points:
     Mercury is a powerful neurotoxin that needs to be 
regulated under Section 112 of the Clean Air Act (CAA) and as such, the 
mercury emissions from powerplants must be subject to a MACT standard;
     Mercury limits must be more stringent than set forth in 
the proposed U.S. EPA rule;
     Any mercury rule for powerplants must be fuel neutral, 
without favoring coal from any particular region of the country, and 
thus, there should be a common standard for bituminous and 
subbituminous coal;
     Illinois EPA opposes emissions trading of mercury 
allowances unless the units involved in trading can demonstrate that 
mercury hotspots are prevented; and
     Mercury emission reductions can and should occur by 2010.
    The comments also stated that U.S. EPA gave insufficient support 
for its extended compliance deadline of 2018, which U.S. EPA 
acknowledged could extend compliance out to 2025 or 2030 due to banking 
elements of the trading program.
    In April 2004, U.S. EPA reversed the regulatory course it 
established in 2000 for regulation of mercury emissions under Section 
112 and announced two key proposals: (1) to remove the source category 
containing coal-fired powerplants from the list of Hazardous Air 
Pollutants (HAP) emitters under Section 112 of the CAA, and, (2) to 
adopt a cap-and-trade program under Section 111 of the CAA instead of 
MACT standards under Section 112 of the CAA. This regulatory approach 
adopted none of Illinois EPA's key points on mercury control.
    On March 15, 2005, U.S. EPA issued the CAMR to permanently cap and 
reduce mercury emissions from coal-fired powerplants. Notably, CAMR did 
not apply a MACT standard to mercury emissions from coal-fired 
powerplants, and instead created a market-based cap-and-trade program 
to reduce nationwide powerplant emissions of mercury in two separate 
phases. The first phase sets a national emissions cap of 38 tons in 
2010 that is to be achieved by mercury reductions occurring as a co-
benefit of requirements for reducing SO2 and NOx emissions 
under the federal Clean Air Interstate Rule (CAIR). No mercury specific 
controls are required in this first phase. The second phase begins in 
2018 and requires coal-fired powerplants to meet a reduced national cap 
of 15 tons. Illinois' budget, or cap, under CAMR is 1.594 tons per year 
of mercury for Phase I and 0.629 tons per year for Phase II. U.S. EPA 
estimates that CAMR provides mercury emission reductions from Illinois 
coal-fired powerplants of approximately 47 percent by 2010 and 79 
percent by 2018.
    After review of CAMR, the Illinois EPA determined that CAMR will 
not result in timely and sufficient reductions of mercury and that the 
rule contained biased allocation methods that favored non-Illinois 
coals and thus impeded Illinois' efforts to encourage use of clean-coal 
technologies involving Illinois coal. Illinois EPA requested that the 
Illinois Attorney General's Office file an appeal of CAMR and the 
related U.S. EPA actions. On May 27, 2005, the State of Illinois filed 
Petitions for Review with the United States Court of Appeals for the 
District of Columbia Circuit challenging CAMR. Thirteen other states 
also filed one or more appeals of the CAMR and related actions. These 
appeals are pending.
    Illinois is not required to adopt the CAMR, but must submit a State 
plan to achieve the statewide mercury emissions budget called for in 
the rule and must demonstrate that Illinois' plan will achieve at least 
as much reduction as CAMR. Illinois' plan is afforded the ability to 
forego trading and the other aspects of a cap-and-trade program. 
However, if Illinois' submittal is not timely and deemed acceptable by 
the U.S. EPA, then CAMR will be imposed upon Illinois. Illinois' plan 
was due to the U.S. EPA by no later than November 17, 2006.
    The Illinois EPA determined that the appropriate method to protect 
the public health and environment while meeting federal requirements 
was to adopt reasonable state-specific mercury reduction requirements 
for Illinois' coal-fired powerplants.

            ILLINOIS MERCURY RULE DEVELOPMENT CONSIDERATIONS

    In developing the Illinois mercury rule, Illinois EPA took several 
steps, including consulting recognized experts, holding discussions 
with stakeholders and interested parties, conducting research and 
literature reviews, and utilizing internal experts and staff.
    A key finding was that mercury control technologies have advanced 
significantly over the last several years (e.g., use of halogenated 
sorbents) resulting in both a reduction in costs of mercury control and 
increased effectiveness. The trend is one where technological advances 
and vendor expansion should continue to lead to decreasing costs and 
increasing control efficiencies and options.
    The Illinois EPA retained the service of Dr. James Staudt of 
Andover Technology Partners to assist us in understanding the state-of-
the-art in mercury controls, levels of mercury reductions obtainable 
under different control configurations, and the associated costs. Dr. 
Staudt is a nationally renowned expert on coal-fired powerplant 
controls and has done similar work for U.S. EPA, among others.
    The Illinois EPA relied on several basic principles as guidance in 
developing the proposed rule:
     The need to protect human health, fish and wildlife, and 
the environment from the harmful effects of mercury and methylmercury;
     The need to control the unregulated mercury emissions from 
Illinois' coal-fired powerplants to the greatest level possible and as 
quickly as possible in a cost-effective manner;
     Must consider the latest control technology that has been 
shown effective in controlling mercury emissions and which can be 
reasonably employed, in a cost effective manner, across the full fleet 
of Illinois powerplants and coal types;
     Must ensure that the required mercury reductions occur 
both in Illinois and at every powerplant in Illinois to address local 
impacts; and
     The rule needs to incorporate flexibility in complying 
with the proposed standards to assist in widespread compliance and to 
help reduce compliance costs.
    We also sought to ensure that the rule would not encourage a switch 
to the use of non-Illinois coal and interfere with actions to promote 
the use of Illinois coal in clean-coal technology applications. 
Therefore, the rule does not treat sources differently or establish 
different requirements based on the type of coal being used. This is 
contrary to CAMR, which established state mercury budgets, as well as 
proposes a baseline allocation scheme that provides higher allowances 
for units burning coal types other than Illinois bituminous coal. 
Furthermore, credit for mercury removal from coal washing was given by 
establishing an output-based limit that accounts for mercury removal 
during pre-combustion processes such as coal washing.
    Careful consideration was given to the effect mercury control 
requirements will have on Illinois' economy, including consumers, jobs, 
and the power sector. Illinois carefully selected an achievable, 
reasonable, and cost-effective mercury reduction target. Illinois 
research established that data supported a 90 percent reduction as an 
achievable and reasonable level of mercury control for Illinois 
powerplants and that the costs of controlling mercury are consistent 
with Illinois' goals. In addition, we looked into the amount of mercury 
reduction in fish tissue levels needed to get below fish consumption 
advisory levels. The mercury reduction amount required for a selected 
species (e.g., largemouth bass) in order to reach unlimited consumption 
levels by childbearing age women and children less than 15 years of 
age, the most sensitive and restrictive sub-population, is about 90 
percent. Moreover, a November 2005 mercury control model rule proposed 
by then State and Territorial Air Pollution Administrators (STAPPA) and 
Association of Local Air Pollution Control Officials (ALAPCO) provided 
two options, both of which had initial Phase 1 compliance dates set at 
the end of 2008 and required final cuts in mercury equivalent to 90-95 
percent by the end of 2012. Illinois also reviewed the actions of 
several states that have selected compliance dates earlier than 2009 as 
well as mercury reduction requirements of 90 percent or greater.
    In addition to the detailed mercury control and cost analysis 
performed by Illinois' technical expert, Dr. Staudt, Illinois utilized 
the services of ICF Resources Incorporated (ICF) to evaluate the 
economic impact of the rule on Illinois' electricity rates and affected 
powerplants. While there are some additional costs predicted from the 
rule when compared to CAMR, the costs are deemed to be reasonable in 
light of the concerns presented by mercury pollution and the potential 
benefits of mercury control.
    Illinois EPA determined that it can achieve the required mercury 
reductions proposed by Governor Blagojevich and give compliance 
flexibility to sources. Giving flexibility serves to reduce compliance 
costs and increase the probability of widespread compliance.
    Illinois was also concerned with the potential for so-called 
mercury hotspots. We addressed the hotspot issue by not allowing 
trading, or the banking or purchase of emissions allowances, and by 
requiring mercury reductions at all powerplants. Ensuring emission 
reductions take place in Illinois and at all locations where 
powerplants exist should reduce local impacts and hotspots.
    A multi-pollutant approach for controlling the emissions of 
mercury, SO2, and NOx from coal-fired powerplants has 
numerous advantages over a traditional, single regulatory pollutant 
scheme. For example, a well crafted multi-pollutant standard can 
increase the protection of public health and the environment, reduce 
pollution more cost-effectively, and offer greater certainty to both 
industry and regulators. Since mercury emission reductions can be 
obtained as a co-benefit from the control devices used to reduce 
SO2 and NOx, it makes sense to allow companies the option to 
synchronize the control of these pollutants, provided that public 
health and the environment are likewise positively impacted. Whereas 
the mercury rule single-mindedly tackles mercury emissions, and CAIR 
concentrates on SO2 and NOx, both the MPS and the CPS 
accomplish the aforementioned benefits in the context of a single 
regulatory framework and in recognition of the timing and other issues 
that accompany a combined-pollutant control strategy.

                            MERCURY CONTROLS

    Many options exist for curtailing mercury emissions that occur as a 
result of the combustion of coal at powerplants. These options include 
the cleaning of coal to remove mercury before combustion, improving 
boiler efficiencies so that less coal is burned to obtain the same 
amount of energy output, and the use of add-on air pollution control 
equipment. All of these options can be used either alone or in 
combination to arrive at an effective mercury control strategy. Several 
variables play a role in determining what strategy and control options 
are best suited and effective for mercury reductions at a given 
powerplant including, coal type, existing controls, boiler type, fly 
ash needs, and economic feasibility.
    Dr. Staudt with the assistance of Illinois EPA staff conducted a 
unit-by-unit analysis of Illinois' fleet of coal-fired electric 
generating units. The results of this analysis are found in Section 8 
of the mercury rule's technical support document. In general it was 
found that a 90 percent reduction in mercury was widely achievable in 
Illinois in a cost effective manner. Overall, the costs per pound of 
mercury removed for compliance with the Illinois rule was estimated to 
be around $8,100 per pound of mercury captured. For comparison, the 
estimated cost to comply with the 2010 CAMR state budget through use of 
control technology was lower at around $5,800 per pound of mercury 
removal, for far fewer reductions.
    The use of halogenated activated carbon injection (ACI) was found 
to provide a high level of mercury control at reasonable costs for the 
majority of Illinois' units. ACI has been used for years to reduce 
mercury emissions on municipal waste combustors with mercury removal 
efficiencies of more than 90 percent. There has been wide-scale testing 
of ACI systems on numerous coal-fired powerplants with mercury 
reductions of greater than 90 percent achieved and ACI is now beginning 
to be deployed on coal-fired units in the United States. ACI vendors 
have stated they are able to provide large scale installation of ACI 
systems on powerplants in Illinois and we are aware of several 
negotiations underway between the parties to test and install ACI 
systems.
    Of course the ultimate decision of strategies and controls employed 
will be made by the owners and operators of the powerplants themselves, 
and most likely be governed by the economics at the time. Attempts to 
predict these decisions are ``best guesses'' of the types of controls 
that will be actually put into practice. The noted trend that is 
expected to continue is one where technological advances lead to 
decreasing costs, increasing control efficiencies, and expanding 
options.

                         ILLINOIS MERCURY RULE

    The rule requires mercury reductions from Illinois' coal-fired 
powerplants in two phases. During Phase I, which begins on July 1, 
2009, coal-fired powerplants must comply with either an output-based 
emission standard of 0.0080 lbs mercury/gigawatt hour (GWh), or a 
minimum 90 percent reduction of input mercury, both on a rolling 12-
month basis. However, plants with the same owner/operator may elect to 
comply with the limit on a system-wide basis by averaging across their 
entire fleet of plants in Illinois, provided that each plant meets a 
minimum output-based emission standard of 0.020 lbs mercury/GWh or a 
minimum 75-percent reduction of input mercury.
    In Phase II, beginning January 1, 2013, plants must comply with 
either an output-based emission standard of 0.0080 lbs mercury/GWh or a 
minimum 90 percent reduction of input mercury, both on a rolling 12-
month basis. The rule does not allow for the trading, purchasing or the 
banking of allowances.
    Flexibility provided by the rule includes the following:
     The source has the option of complying with either a 
mercury reduction efficiency or an output based emission rate;
     The proposed rule does not prescribe how compliance with 
the selected standard is to be achieved; instead, the affected source 
makes the ultimate decision on how compliance is obtained;
     The proposed rule phases in standards over a period of 
3\1/2\ years, with a less restrictive standard in Phase 1;
     The rule allows a source to demonstrate compliance by both 
system-wide and plant-wide averaging in Phase 1, and plant-wide 
averaging in Phase 2;
     The rule allows for sources that commit to shutdown within 
a certain timetable to avoid installing controls.
     The rule has a temporary technology based option that 
provides relief for a limited number of emission units that install 
appropriate mercury controls but are unable to achieve compliance. 
Eligible units are only required to operate the mercury controls in an 
optimal manner to be deemed in compliance. This provision is available 
through June 2015 and can be used by up to 25 percent of a company's 
generating capacity.
     Perhaps most importantly, the rule allows for sources to 
opt-in to multi-pollutant standards (e.g., MPS or CPS) which allow 
additional flexibility in regard to mercury for sources that commit to 
reductions in SO2 and NOx. The primary mercury compliance 
flexibility provided by the MPS and CPS is that, although companies are 
still required to install mercury controls able to achieve a 90 percent 
reduction on all but a few of the smallest units by no later than mid 
2009, actual compliance is not required until 2015 provided they 
operate the mercury controls in an optimal manner.
    The monitoring requirements of the rule are essentially the same as 
those outlined in the model federal CAMR. However, in addition to 
monitoring outlet mercury emissions, the Illinois mercury rule also 
requires sources complying with the rule via the 90 percent reduction 
standard to determine, through coal analysis, the input mercury in 
order to determine the removal efficiency.

                  EFFECT OF THE ILLINOIS MERCURY RULE

    The mercury reductions obtained from Illinois' rule will be beyond 
those of the federal CAMR and will occur more quickly. Whereas CAMR 
would cap Illinois' annual mercury emissions at 3,188 pounds by 2010 
through 2017, the Illinois rule results in annual mercury emissions of 
only around 770 pounds beginning mid-2009. Therefore, the rule is 
anticipated to eliminate approximately 2,418 additional pounds per year 
of harmful mercury pollution, and do so six months earlier than the 
federal CAMR. The reductions obtained under the Illinois rule will 
likewise be greater than those required in Phase II of CAMR, which does 
not go into effect until 2018. The CAMR budget for Illinois in Phase II 
is 1,258 pounds per year, but with banking allowed under CAMR, it is 
not expected that actual emission reductions will occur until 2020 or 
later. Compared to CAMR, the Illinois rule should result in 488 fewer 
pounds of mercury emissions per year about seven years sooner. It is 
important to note that CAMR is a cap and trade program and therefore, 
under CAMR, Illinois powerplants could postpone or avoid some mercury 
reductions through the purchase or banking of allowances, an option not 
allowed under Illinois' rule.
    Over time, Illinois expects to see reductions in mercury water 
deposition to Illinois' lakes and streams and corresponding 
methylmercury decreases in Illinois fish tissues, making fish caught in 
Illinois waters safer to eat.
    We also expect to see significant benefits to human health, 
although it is difficult to estimate a dollar value for such things as 
improvements in IQ and less cardiovascular disease. There could also be 
several recognized benefits to Illinois beyond the expected public 
health benefits that come with a reduction in water and fish 
methylmercury levels. Such benefits include support for existing, and 
the potential for additional, jobs resulting from the installation and 
operating requirements of additional pollution control devices. There 
also exists a potential for an increase in tourism and recreational 
fishing as mercury levels drop in fish, bringing an associated positive 
impact to local economies and the State overall. With a possible 
increase in the use of bituminous coal, there should be a positive 
economic impact on the Illinois coal industry and Illinois coal mining 
jobs.

                        ECONOMIC CONSIDERATIONS

    In evaluating the economic impacts of the rule, Illinois EPA 
consulted and retained the services of experts, stakeholders and 
interested parties, conducted literature reviews, and utilized internal 
staff.
    In order to better understand the economic effects of the mercury 
rule, Illinois retained the services of ICF Consulting Inc. (ICF), the 
same firm used by U.S. EPA for CAMR. ICF conducted a study evaluating 
the economic impacts of the mercury rule using the Integrated Planning 
Model (IPM). This study focused on the impacts of the mercury rule in 
terms of costs to the power sector and costs to electricity consumers.
    Of significant importance is that a ``more stringent'' rule than 
the final adopted rule was modeled and therefore the results are 
considered conservative. Illinois EPA discussed modeling parameters 
with ICF prior to the modeling and it was determined that where the 
modeling inputs allowed discretion, we would err on the side of being 
conservative. Some examples of this are that the IPM was unable to 
reflect the mid-year Phase 1 compliance date of July 1, 2009 and 
therefore for modeling we moved the compliance date up to January 1, 
2009, six months sooner than that required by the Illinois rule. Also, 
the IPM model assumed a mass emissions cap on each and every unit 
where the rule does not cap emissions but requires compliance with a 
standard that allows for growth in electricity generation. Emission 
caps as used in the IPM Model are more stringent than a percent 
reduction control requirement or emissions rate since they also limit 
growth. As a result, the plant output might be severely limited 
depending upon the cap. This implicit limit to the plant output could 
create a situation where the modeling forecasts the plant is no longer 
economically viable whereas it might be viable under a 90 percent 
reduction requirement or 0.0080 lbs Hg/GWh emissions rate that allows 
output growth. For accurate assessment of what the modeling predicts, 
it is critical that the modeling results be viewed in context, i.e., 
taking the above into consideration.
    ICF prepared a comprehensive report for the Illinois EPA in which 
it provides a summary of the modeling results and identifies what it 
believes are the principal findings of the study. Of note is that 
modeling shows only a 1-3.5 percent increase in retail electricity 
prices and costs across all sectors (e.g., residential, industrial and 
commercial) from the rule relative to the CAMR. On an average bill 
basis, residential customers in Illinois would pay less than $1.50 per 
month more under the Illinois rule relative to CAMR across the study 
horizon.
    IPM modeling predicts that two powerplants may be adversely 
impacted to the extent that some small, older coal-fired units are 
retired, potentially resulting in some corresponding job loss. Note 
that economic experts consulted by the Illinois EPA who have reviewed 
the IPM modeling believe that the modeling is not accurate in 
predicting the retirement of these plants as a result of the rule. The 
modeling also forecasts an increase in the use of bituminous coal as a 
direct result of the mercury rule. This increase should have a positive 
impact on Illinois coal related operations, such as Illinois coal mines 
and jobs, since most of the bituminous coal fired in Illinois is mined 
in Illinois. The modeling further shows corresponding decreases in the 
use of subbituminous coal, which is mined in western states. Of 
particular interest is that were Illinois to implement CAMR instead of 
the mercury rule, IPM modeling shows a decrease in bituminous coal 
use.
    The Illinois EPA found that there would be no significant adverse 
impact to the safety and reliability of the electricity distribution 
grid as a result of the rule. We also found that there could be 
significant economic benefits as a result of the rule in the form of 
support for existing jobs and potential for new jobs in the pollution 
control device installation industry, fishing industry, and Illinois' 
coal industry.
    The Illinois EPA retained the services of Synapse Energy Economics, 
Inc. (Synapse) to review the modeling performed and to testify before 
the Board on issues related to the IPM modeling. In addition, Synapse 
was asked to assist the Illinois EPA in understanding a wide range of 
economic issues related to the rule. These include the potential effect 
of the rule on the reliability of the electricity grid, Illinois jobs, 
consumer electric rates, competitiveness of coal-fired powerplants, and 
potential for retirement of coal-fired units, and costs to the power 
sector. In particular, due to the serious nature of any potential unit 
retirements and loss of competitiveness of Illinois' coal-fired owner 
plants in comparison to other states, the Illinois EPA requested 
further review of these issues by its economic experts, (e.g., 
Synapse). The Illinois EPA also believed that these issues warranted 
further review due to the conservative representation of the rule by 
the modeling and the corresponding potential for the modeling results 
to overestimate any negative impacts.
    The above considerations focus on the economic impacts associated 
with issues outside of public health benefits. However, when evaluating 
the appropriateness of the potential costs of any rule, the costs 
associated with the rule must be measured against the costs to society 
of continued contamination from the targeted pollutant and the 
intimately related monetized health benefits expected from reduced 
emissions. Illinois reviewed the numerous studies on the monetized 
health benefits of mercury control of coal-fired powerplants nationwide 
and found that the annual benefits are conservatively estimated in the 
range of $10.4 to $288 million. Notably, in the rule development 
process of the federal CAMR, the U.S. EPA may not have recognized the 
full societal cost benefit of controlling mercury emissions. This is 
highlighted by the fact that U.S. EPA did not consider the results of 
the Harvard/NESCAUM study as well as other recent studies in its 
analysis of the full benefits of mercury control. Illinois' expert on 
the health effects of mercury, Dr. Rice, found that the costs to 
society from cognitive deficits in adults, accelerated aging, and 
impairment of elderly to live independently due to methylmercury 
exposure have not been monetized. Therefore, the costs to society from 
mercury pollution from coal-fired powerplants, although extremely 
large, may be substantially underestimated. The preponderance of 
available information indicates potentially huge monetized health 
benefits from mercury control.

                               CONCLUSION

    Recent advances in mercury control technology have improved control 
efficiencies and reduced the costs to control mercury. The federal CAMR 
does not account for these advances and does not go far enough or go 
fast enough in reducing the emissions of this highly toxic pollutant. 
Illinois coal-fired powerplants are the largest source of man-made 
mercury emissions in the State and as such, the Illinois mercury rule 
aims to eliminate as much of the mercury emissions from these sources 
as is reasonably possible, and to do so as quickly as possible. The 
Illinois EPA used several avenues, including the retention of services 
of nationally recognized mercury and economic experts, in order to 
obtain the latest, most accurate information on mercury and mercury 
controls, as well as to assist in rule development and impact analyses. 
We feel that the rule provides for deep, attainable cuts in mercury 
emissions while providing compliance flexibility and other measures 
designed to minimize costs to affected sources. The non-public health 
economic implications of the rule, although difficult to forecast, are 
variable with some potential benefits provided in the area of jobs and 
increased recreational activity and possible negative impacts such as 
increased costs to the power sector and the potential for the 
retirement of some coal-fired units. The impact to Illinois consumer 
electricity bills should be minimal. The potential benefits to the 
public health of Illinois citizens from the proposed rule are 
substantial, as the harmful effects from mercury to IQ and 
cardiovascular systems, to name a few, are lessened. We expect to see 
lower mercury deposition to Illinois waterbodies and corresponding 
decreases in methylmercury fish levels, making fish caught in Illinois 
safer to eat.
    The SO2 and NOx reductions agreed to under the MPS and 
CPS are expected to go a long way toward helping Illinois achieve its 
attainment goals for ozone and particulate matter. The final estimates 
on emission reductions are enormous. The Illinois EPA estimates the 
total emission cuts from all three power companies at 233,600 tons per 
year of SO2, 61,434 tons per year of NOx and 7,040 pounds 
per year of mercury. This equates to reductions of SO2 of 76 
percent for Ameren, 65 percent for Dynegy, and 80 percent for Midwest 
Generation. These SO2 cuts begin no later than 2013 and 
continue on through 2018. The reductions in annual NOx emissions 
average around 52 percent and occur no later than 2012.
    Under CAMR, coal-fired power producers in Illinois would have only 
been required to reduce their mercury emissions by 47 percent in 2010 
and 78 percent by 2018, not the 90 percent reduction by 2009 required 
in the Illinois rule. The amount and general timing of mercury 
reductions for those sources that opt-in to the MPS or CPS are 
estimated to be essentially the same, although they will not be 
required to comply on a 12-month rolling basis until 2015. Sources 
under the MPS and CPS are expected to have mercury emission reductions 
that exceed even the required 90 percent in the Illinois mercury rule 
after 2015 due to the co-benefit reductions achieved from the 
installation of new controls needed to comply with the corresponding 
SO2 and NOx standards.
    The benefits of removing SO2 and NOx are well 
established and most notably will result in reductions in both 
particulate matter and ozone. SO2 is a precursor to 
particulate matter and NOx is a precursor to both particulate matter 
and ozone. Particulate matter related annual benefits include fewer 
premature fatalities, fewer cases of chronic bronchitis, fewer non-
fatal heart attacks, fewer hospitalization admissions (for respiratory 
and cardiovascular disease combined) and should result in fewer days of 
restricted activity due to respiratory illness and fewer work loss 
days. Moreover, there should be health improvements for children from 
reduced upper and lower respiratory illness, acute bronchitis, and 
asthma attacks.
    Ozone health-related benefits are expected to occur during the 
summer ozone season and include fewer hospital admissions for 
respiratory illnesses, fewer emergency room admissions for asthma, 
fewer days with restricted activity levels, and fewer days where 
children are absent from school due to illnesses. In addition, there 
should be ecological and welfare benefits. Such benefits include 
visibility improvements; reductions in acidification in lakes, streams, 
and forests; reduced nutrient replenishing in water bodies; and 
benefits from reduced ozone levels for forests and agricultural 
production.
    Thank you again to the committee for allowing me to testify today 
on behalf of Governor Rod Blagojevich and the Illinois EPA.
                                 ______
                                 
      Responses by Douglas P. Scott to Additional Questions from 
                            Senator Sanders

    Question 1. Your state has gone well beyond EPA's ``Clean Air 
Mercury Rule'' by requiring faster and deeper mercury reduction from 
powerplants. Please tell us what you concluded about the current and 
future state of mercury pollution control technologies during the 
period in which your rule will be carried out that led you to believe 
utility owners could achieve the mercury standards in your law. What, 
if any, communications have you received from EPA regarding your state 
mercury standards?
    Response. Illinois concluded that mercury control technologies 
currently exist that can provide a high level of mercury reductions in 
a cost-effective manner for coal-fired powerplants. We found that 
mercury control technologies have advanced significantly over the last 
several years, and since U.S. EPA promulgated the Clean Air Mercury 
Rule (CAMR), and that such advancements have resulted in both increased 
control effectiveness and a reduction in costs of mercury control. We 
believe the future of mercury control technologies is one where 
technological advances and vendor expansion should continue to lead to 
decreasing costs and increasing control efficiencies as well as a wider 
variety of mercury control options.
    In developing its mercury rule, Illinois took several steps to 
assess the state-of-the-art in mercury control technologies, levels of 
mercury reductions obtainable under different powerplant and control 
equipment configurations, and the associated costs. These steps 
included consulting recognized experts, holding discussions with 
stakeholders and interested parties, conducting research and literature 
reviews, and utilizing internal experts and staff. We also retained the 
services of Dr. James Staudt of Andover Technology Partners. Dr. Staudt 
is a nationally recognized expert on coal-fired powerplant controls and 
has done similar work for U.S. EPA, among others.
    Dr. Staudt, with the assistance of Illinois EPA staff, conducted a 
unit-by-unit analysis of Illinois' fleet of coal-fired electric 
generating units. The results of this analysis are found in Section 8 
of Illinois mercury rule's technical support document. Illinois 
concluded that a 90 percent reduction in mercury was widely achievable 
in Illinois in a cost-effective manner. In particular, the use of 
halogenated activated carbon injection (ACI) was found to provide a 
high level of mercury control at reasonable costs for the majority of 
Illinois' units. ACI has been used for years to reduce mercury 
emissions on municipal waste combustors with mercury removal 
efficiencies of more than 90 percent. There has been wide-scale testing 
of ACI systems on numerous coal-fired powerplants with mercury 
reductions of greater than 90 percent achieved and ACI is now beginning 
to be deployed on coal-fired units in the United States. ACI vendors 
have stated they are able to provide large scale installation of ACI 
systems on powerplants in Illinois and we are aware of several 
negotiations underway between the parties to test and install ACI 
systems.
    Furthermore, Illinois recognized the importance of providing rule 
flexibility to address the level of uncertainty inherent in any 
technology-based regulatory standard. Illinois worked closely with its 
stakeholders on a wide variety of flexibility provisions that were 
incorporated into the Illinois mercury rule, including the multi-
pollutant standards.
    We also found that significant mercury reductions can be obtained 
as a co-benefit from emission control technologies that target sulfur 
dioxide (SO2) and nitrogen oxides (NOx). By adopting mercury 
control rules that consider SO2 and NOx control strategies, 
and allowing companies to implement an integrated multi-pollutant 
control strategy for all three pollutants (i.e., mercury, 
SO2 and NOx), Illinois concluded that even greater emissions 
reductions and public health benefits can be achieved than under a 
strategy that solely focused on mercury control technologies.
    The Illinois EPA has had numerous discussions with U.S. EPA 
regarding the acceptability of the Illinois mercury rule as part of its 
state plan for mercury control to ensure compliance with the federal 
CAMR. The U.S. EPA has indicated that they can accept Illinois' mercury 
rule as demonstrating compliance with CAMR through 2017. However, U.S. 
EPA has expressed concern that the Illinois mercury rule may not ensure 
compliance with CAMR beyond 2018. The Illinois EPA adamantly disagrees 
with this assessment and strongly believes that its mercury rule 
results in mercury reductions well beyond the federal CAMR even after 
2018. U.S. EPA appears to have taken a position that for Illinois to 
obtain approval for years after 2018, we need to amend our mercury rule 
to include mercury emissions caps on each of the coal-fired 
powerplants. We are against such caps at this stage and do not believe 
they are necessary. Both our projection of actual mercury emissions and 
an additional conservative projection (sensitivity analysis) of mercury 
emissions show that the Illinois mercury rule will result in mercury 
emissions well below the CAMR emissions caps from the beginning of the 
rule out to 2020. Illinois has proposed to provide an annually updated 
10-year mercury emission projection to U.S. EPA and to take significant 
measures should our emissions projection ever forecast an exceedance of 
the CAMR caps, including taking steps to amend the rule to include 
caps. Furthermore, the Illinois state plan contains corrective action 
measures to be implemented should an exceedance of the CAMR caps ever 
actually occur. Under the corrective action plan, the State has 
committed to amending its rule to include unit by unit emission caps 
and purchasing in the market and retiring mercury allowances to cover 
any emissions over the annual budget.
    It is important to note that the Illinois EPA projects emissions in 
2020 to be around 880 lbs of mercury as compared to 1,258 lbs for the 
CAMR budget. Moreover, during the first eight years of CAMR, Illinois 
is expected to have accumulatively reduced mercury emissions by 12,628 
pounds more than would have occurred under the federal CAMR. Since 
mercury is a bio-accumulative pollutant these earlier and greater 
reductions will continue to benefit public health and the environment 
going forward. We believe U.S. EPA should this factor when evaluating 
the appropriateness and timeliness of Illinois' actions to remedy any 
projected or actual exceedances of the CAMR caps in later years. 
Illinois is considering its options should U.S. EPA formally decide to 
disapprove its state plan for the years after 2017.

    Question 2. EPA declared in it final mercury rules for powerplants 
that it was not only ``unnecessary'' but also ``inappropriate'' to 
regulate mercury emissions from powerplants under the Clean Air Act's 
stringent air toxics provisions in section 112. Hasn't EPA long 
regulated mercury from other types of industries, however, under this 
same stringent Clean Air Act authority? And if so, what has the 
experience been there? Does it make sense to you that it is appropriate 
to regulate mercury emissions from some types of industries using the 
law's most protective tools, but ``inappropriate'' to do so when it 
comes to powerplants?
    Response. It is accurate that U.S. EPA has historically regulated 
mercury emissions under section 112 of the Clean Air Act (CAA). For 
example, mercury emissions from Municipal Waste Combustors (MWC) and 
Medical Waste Incinerators (MWI) are both subject to Maximum Achievable 
Control Requirements (MACT) established under section 112 authority.
    Illinois' plan for large MWC was approved by U.S. EPA in December 
1997. Illinois has no municipal waste combustion units affected by the 
small MWC emissions guideline. However, the MWC regulations affected 
two large sources in Illinois, i.e., Northwest Waste to Energy 
(Northwest) and Robbins Resource Recovery Company (Robbins). Northwest 
shutdown incinerator operations during the regulatory development 
process, and Robbins shutdown incinerator operations in 1998. Thus, 
Illinois does not have any mercury emissions from the municipal waste 
combustors category.
    Illinois believes that the Clean Air Act requires that U.S. EPA 
regulate powerplant mercury emissions under section 112 of the CAA as 
well. In fact, Illinois has elaborated this position to U.S. EPA on at 
least two circumstances: (1) Illinois EPA submitted comments in 
response to a January 30, 2004, U.S. EPA proposed rulemaking, and (2) 
on May 27, 2005, the State of Illinois filed Petitions for Review with 
the United States Court of Appeals for the District of Columbia Circuit 
challenging CAMR.
    Coal-fired powerplants are the largest source of man-made mercury 
emissions, and there is nothing unique about mercury emissions from 
this source category. As such, the timing and level of mercury control 
should be prompt and stringent. The only policy reason to treat this 
source category differently from other industrial sources is the goal 
of allowing mercury control to be achieved as a co-benefit of the 
control of NOx and SO2. The Illinois EPA understands this 
goal, as it is reflected to a degree in our multi-pollutant agreements 
with Illinois' largest powerplant systems. However, this goal should 
not result in undue delay of achieving mercury reductions at ``MACT-
levels'', i.e., 90 percent, nor some units escaping any level of 
mercury control. Moreover, the cap and trade program under CAMR cannot 
guarantee each unit will install appropriate mercury control 
technologies or even that the level at which a plant or State is capped 
is actually met. If the owner or operator chooses, they may comply with 
the CAMR cap at a given unit or plant using emission allowances rather 
than reducing mercury emissions. Such a compliance strategy does not 
provide the appropriate protection for public health and the 
environment for those affected by the plant's emissions and does not 
ensure that mercury emissions reduction goals in a State are achieved.

    Question 3. In addition to the regulation of powerplants, I 
understand that your state and other states have been recycling 
products containing mercury, like auto switches and thermometers. Do 
you know what happens to the mercury once it has been sent to the 
recycler? What do you think about closing the loop by banning the 
export of mercury that is recycled is not then used in ways that 
pollute the environment?
    Response. Mercury recyclers reclaim mercury from products by using 
a multi-stage process to volatilize the mercury and then condense it 
back to elemental mercury. The collected mercury is a commodity which 
is typically sold for reuse. Illinois EPA does not know specifically to 
whom our contracted recyclers sell the mercury that is collected 
through state-sponsored household hazardous waste collection and school 
chemical cleanout programs. More than likely some of it is exported for 
use in other countries.
    Illinois EPA supports a ban on the export of mercury. We would like 
to point out that in 2001, the Environmental Council of the States 
formed the Quicksilver Caucus to collaboratively develop holistic 
approaches for reducing mercury in the environment. Illinois EPA 
endorses the principles for management of commodity grade elemental 
developed by the Caucus. These principles include the following 
elements:
     Reuse of elemental mercury should only be utilized in 
processes or products deemed essential.
     Following the collection and recycling (retorting) of used 
mercury-containing products, the mercury should be sequestered and 
safely stored within the United States.
     The United States should support mechanisms to better 
track international trade of mercury, mercury compounds, and mercury-
containing products.
     The United States should be a leader in proper use and 
management of elemental mercury by not exporting any mercury-containing 
products to other countries unless it is related to an essential use. 
Exporting surplus elemental mercury to developing countries where it 
can result in unsafe exposure should be prohibited. Elemental mercury 
should only be exported to other countries for essential uses where it 
can be demonstrated that the country does not have sufficient domestic 
sources of secondary (recycled) mercury.

    Senator Carper. Thank you so much. Your full statement will 
be in the record.
    The first question I have, and Mr. Schanbacher, I am going 
to ask you to just answer this quickly, if you will, but you 
were good to give us a little bit of a primer, if you will, on 
the different kinds of coal that we have; the different kinds 
of mercury that is created, one type which goes up into the air 
which is transported around the world, and another type that 
does not go all around the world, and comes down, in many 
cases, a lot closer to the place from where it is emitted.
    My understanding is that one of the types of mercury is 
easier to capture as it leaves the powerplants, and another is 
more difficult to capture. Just come back and sort of tie that 
together for us with respect to, or just revisit again what you 
said about bituminous coal, sub-bituminous, and the elemental 
mercury and divalent mercury. Just take a moment to go through 
this. I think it is important for us to understand this.
    Mr. Schanbacher. Okay, I will try to do this as quickly as 
possible. Bituminous coal, which is primarily burned in the 
eastern part of the United States, has a lot of chlorine in it. 
The chlorine, when you burn the coal, helps convert mercury 
from elemental, which is sort of chemically stable, to 
divalent, which has an electric charge associated with it. 
Divalent mercury attaches more easily to particles, and also it 
is water soluble. So in the typical control devices that we use 
for powerplants, it is a lot easier to catch that kind of 
mercury than the elemental mercury.
    The lignite and sub-bituminous coals that are burned 
primarily in the western United States don't have a lot of 
chlorine. So the mercury is not converted in the burning 
process. Most of it is elemental mercury, which basically is 
not water soluble and tends to pass through a lot of control 
devices, because it doesn't attach to particles or wash out in 
rain. It tends to enter the global mercury pool and travel long 
distances. Eventually, it would settle out, but it takes quite 
some time. As I think was previously mentioned, we kind of 
contribute about 1 percent of the mercury pool.
    So the divalent mercury is the stuff that is more likely to 
cause immediate concerns and local deposition. It is much 
easier to control divalent mercury from bituminous coal because 
it is upwards of 80 to 90 percent of the emissions.
    Senator Carper. All right. Thank you.
    Mr. Scott, a question coming back to really the statements 
and the concerns voiced by Senator Voinovich, really. When you 
presented these requirements and the expectation that the 
utilities were going to have to dramatically cut their mercury 
emissions within a relatively few years, my understanding is 
that they did not react warmly to that suggestion.
    Mr. Scott. That is correct.
    Senator Carper. In the end, I think I heard you say there 
was one utility that indicated that they could comply, and that 
subsequently others decided that they could as well. Talk a 
little bit about that process.
    Then I am going to ask you to reflect on what these rules, 
what your rules in your State are going to do with respect to 
cost of electricity or the impact on consumers, shifting from 
coal to natural gas, because you have a lot of coal in your 
State, but just start off by the initial reaction of the 
utilities, the one that said we think we can do this, and how 
that snowballed from there.
    Mr. Scott. It started off, as you accurately portrayed, 
with almost universal rejection by the power producing 
companies of our rule.
    Senator Carper. What did they say?
    Mr. Scott. They were saying that they couldn't get to 90 
percent. Not so much that it would be too expensive, although 
we heard some of those arguments, but more that the technology 
was not available for them to be able to reach 90 percent. So I 
had a meeting with all of the power companies in which I 
suggested to them that we were also interested in multi-
pollutant solutions. If one of them was so inclined, or any of 
them were so inclined, that we would be willing to work with 
them on that.
    Shortly, again, after we presented our case in front of the 
Pollution Control Board, we were approached by Ameren, one of 
the companies in our State, and we subsequently were able to 
negotiate an agreement with them.
    Again, I think the key for them is that while we believe 
that they can achieve those rates of 90 percent by 2009, you 
know, I may take heed of the statement that Senator Voinovich 
made in that he is correct. There are not a lot of companies 
that will guarantee that right now. So that certainty was very 
important for both Ameren and for the other companies.
    So we negotiated in the multi-pollutant solution, giving 
them a little bit more flexibility, a little bit more time. 
They have to install all the equipment that we would recommend 
that we think will get them to 90 percent, but they don't 
necessarily have to hit that number until a later date. In 
exchange for that, they were willing to give us much greater 
reductions of SO2 and NOx.
    We don't believe that it is going to result in fuel 
switching to natural gas at all, in any of our discussions with 
any of these companies.
    Senator Carper. Is that a view that is shared by the 
companies themselves?
    Mr. Scott. That was shared with us by the companies. In 
fact, one company, most of them don't burn Illinois coal, 
surprisingly enough. Most of them are burning western coal, to 
get back to Mr. Schanbacher's point, but not because of 
mercury. They don't burn Illinois coal because of the sulfur 
content in there. It is much more expensive to remove that. But 
actually, one of the companies told us that with a couple of 
their plants, they continue to burn Illinois coal as part of 
this agreement as well. So no real talk of fuel switching at 
all from any of the companies that were involved there.
    Senator Carper. All right. Is Illinois coal cheaper than 
western coal?
    Mr. Scott. Actually, it is not necessarily cheaper. It is 
more expensive in many respects to burn because of the extra 
measures that have to be taken to remove the sulfur dioxide. It 
is our hope that with this and with lots of the equipment that 
is going to be installed as a result of the multi-pollutant 
solution, it is our hope that more of the plants will be able 
to actually burn Illinois coal because they are installing the 
equipment that will actually allow them to burn it and to still 
meet the requirements that we have set up with them.
    Senator Carper. So what I understand from you, you are 
saying initially the targets for the mandates, if you will, 
rejected, maybe with one exception by the utility companies. 
You entered into a dialogue and negotiation with them, and by 
sort of combining the approach with SOx, NOx, as well as with 
mercury, and showing some flexibility, you were able to 
eventually bring them on board. You don't think that there is 
going to be a shifting from coal to gas?
    Mr. Scott. That is correct.
    Senator Carper. You don't see a significant spike in the 
cost of electricity?
    Mr. Scott. The interesting thing about cost, with respect 
to mercury, we did model the mercury cost because we were doing 
that as part of our presentation for the rule in order to give 
weight and testimony behind the rule. We anticipated that that 
would be less than $1.50 a month for the average consumer in 
terms of the mercury equipment that was put on there. We think 
that is a very conservative measure.
    With respect to the other equipment that is put on as part 
of the multi-pollutant solution, that is much more expensive 
equipment. There, you are talking about baghouses and scrubbers 
and other equipment that is much more expensive than the 
injection process to remove mercury. But we did not model those 
in terms of price because we weren't trying to approve the 
rule. We had agreement from the companies.
    Obviously Illinois is a large power exporter as well, and 
so most of the power, at least by one of the companies that we 
negotiated with, is not going to end up in Illinois. It is 
going to be sold out of State, and they are competing with 
other States and other power companies to sell into the grid. 
They firmly believe that they are going to be able to do that 
economically. So that was the part of our discussion with them, 
but we didn't model those costs.
    Senator Carper. Great. Thanks.
    Ms. Wolfe, we have time for another round. I am going to 
come back and ask you a question or two as well.
    Senator Voinovich? Thank you.
    Senator Voinovich. Both in Illinois and in New Jersey, you 
have done differently than what we have in the rule that came 
out from the EPA. Ms. Wolfe, in New Jersey, you require a 90 
percent reduction in mercury emissions from powerplants by the 
end of this year. Is that right?
    Ms. Wolfe. Correct.
    Senator Voinovich. But the rule allows an additional 5 
years of mercury emissions reductions or phase-in with 
concurrent reductions of particulate sulfur dioxide and 
nitrogen oxides. The question is: Isn't this very similar to 
what the EPA rule allows today? Can you quantify the 
differences? For example, what is the State's requirement for 
sulfur dioxides versus the Federal requirement, or for nitrogen 
oxide? I know these are kind of technical questions, but can 
you help me on that?
    Ms. Wolfe. Yes. First of all, I would like to apologize on 
behalf of Commissioner Jackson for not being able to make it 
here today. She had an emergency with those wild fires down in 
South Jersey, so please accept my apology on her behalf.
    Getting to your point about, is our rule different than the 
CAMR rule. I believe it is significantly different than the 
CAMR rule. The CAMR rule requires reductions of mercury of 20 
percent by the year 2010. Our rule requires 90 percent by 2007, 
but for those facilities with 50 percent of their capacity have 
to meet that 90 percent reduction, and then for the remaining 
50 percent, if they enter into an enforceable agreement with 
the State, they then get the additional 5 years to come up with 
the multi-pollutant controls. So they do have to control 50 
percent of their capacity by 2007, the end of this year.
    In terms of what the NOx and the SO2 standards 
are, they are similarly based, I believe, on CAIR. Those 
standards are CAIR-based. We have had success with one of our 
facilities, actually, which has entered into a multi-pollutant 
agreement with us, PSE&G. I believe that their tests are 
currently achieving our mercury standards by meeting the multi-
pollutant standards for SO2 and NOx in particulates.
    Senator Voinovich. Isn't the reason why, and I say the same 
thing in Illinois, they come back and say, look, the cost of 
putting in this technology for mercury is very expensive and 
uncertain; we would prefer to do NOx and SOx because we are 
much more confident of the equipment that is there that has 
been around for a while; we know we can really make a 
difference there; and as a result of that, you are going to get 
some real significant co-benefits in terms of the mercury; so 
overall, in terms of our costs to our customers, this is a more 
reasonable approach for us to take.
    Ms. Wolfe. If I might just add, Senator Voinovich. We have 
had tremendous success in the solid waste incineration area, 
where we are requiring ACI, activated carbon injection, where 
we have had tremendous success at not such significant costs. 
We were told when we first adopted our regulations back in 1994 
that garbage would be on the streets in Camden because we had 
such strict regulations. Instead, the technology seemed to 
follow the regulation, and we were able to have such controls.
    We have upwards of 99 percent control on the municipal 
solid waste industry. We believe that that technology can be 
transferred and has been transferred to activated carbon 
injection at various levels, which is up to the facility. We 
gave the facilities 5 years in order to experiment with trying 
to figure out what the appropriate levels of carbon injection 
would be. We have had tremendous success, and we believe that 
that success at reasonable costs can be applied to the coal-
fired power units.
    Finally, I want to add that when we adopted our rules that 
set a 90 percent standard by the end of the year, none of our 
powerplants challenged our regulation as being technologically 
or economically unfeasible.
    Senator Voinovich. Mr. Schanbacher, I would like you to 
comment on what you have just heard in terms of the state of 
the technology that is available for mercury.
    Mr. Schanbacher. Well, I wouldn't compare waste 
incineration to coal-fired powerplants. I think there are 
significant differences. I wouldn't look at success there.
    Activated carbon injection has been pretty successful with 
bituminous coal in controlling mercury emissions. I don't know 
about 90 percent, but I suppose it is possible. That is part of 
the issue with the different coal ranks, because activated 
carbon injection certainly has not proven to be effective on 
elemental mercury.
    One of the things that is being experimented with is 
injecting chlorides or other halogens in with the activated 
carbon to try to convert the elemental mercury to divalent 
mercury so it can be more easily controlled. One of the points 
I tried to make earlier was if your capture rate is not 100 
percent, you run the risk of taking, I don't want to say 
benign, but certainly a less urgent form of mercury, elemental 
mercury, and converting it into divalent. If you don't control 
it, then you run the risk of actually have more deposition.
    I do agree that eventually technology is going to catch up. 
It is possible it could happen on a faster basis than CAMR 
anticipates, but we don't know right now. Quite frankly, that 
is one of the reasons we in Texas always go back and look at 
the underlying risk to see how urgent it is. Given the 
extensive CDC data, corroborated by Texas data, we don't 
believe getting out ahead of it is in the best interests of the 
people.
    Senator Voinovich. I am glad you do that because we are not 
allowed to do that on the Federal level.
    Mr. Schanbacher. Right.
    Senator Voinovich. We can do it with water, but we can't do 
it with air, according to the Supreme Court. So we don't do the 
cost benefit analysis, and then the last thing because we have 
to go over and vote, but it would be interesting to me to know 
what metrics New Jersey and Illinois have in place to really 
determine in the next 5 years whether or not this is really 
making a difference in terms of your water quality. Do you 
believe that 5 years from now, you are going to be able to 
remove the signs that say if you are pregnant, you ought not to 
eat this fish more than once a month, or whatever your 
particular advisory is.
    I know when I was chairman of the Council of Great Lakes 
Governors, we always were debating, one State versus the other, 
because we had different rules about warning people about how 
much fish that they could eat, and also the different types of 
fish. But I would really be interested if there is any way you 
can find out whether or not all of what you are doing is really 
going to make a difference, particularly when you know that a 
lot of mercury is coming from other places.
    Senator Carper. Okay. Senator Voinovich, if it is okay with 
you, I think I am inclined to excuse this panel. We have three 
votes coming up. We should be back within about 40 minutes to 
go. I would say to our panelists, thank you, especially Ms. 
Wolfe for pinch-hitting. Mr. Schanbacher and Mr. Scott, thank 
you for being here to present to us. It was very informative.
    We are going to be asking you some questions, probably some 
follow-up questions in writing. To the extent that you can 
respond to those promptly, we would be most grateful.
    The subcommittee stands in recess until the completion of 
these votes. Thank you very much.
    [Recess.]
    Senator Carper. I want to thank our panelists for sticking 
around, so we can hear from you and have a chance to ask you 
some questions. Senator Voinovich is coming back from the 
Floor. We have finished our last of three votes, at least for 
now. My hope is that we will be able to conclude this panel 
without further interruptions.
    First of all, let me take a moment just to briefly 
introduce our witnesses, and ask them to go ahead and testify, 
not all at once, but in this order please. We will start with 
Martha Keating from the Nicholas School of the Environment and 
Earth Sciences down at Duke. Welcome. We are glad that you are 
here. I told Ms. Keating that we share an interest in the name 
Martha. My wife's name is Martha and she is also from North 
Carolina.
    And Guy Pipitone is here, the senior vice president of 
Operations, Strategy and Development at First Energy. Where do 
you live?
    Mr. Pipitone. In Akron, OH.
    Senator Carper. Akron, OH, home of the Zips. Good. All 
right. Well, welcome.
    And David Foerter. He is executive director of the 
Institute of Clean Air Companies. It is good to see you again. 
Thanks for joining us today, David.
    And Dr. Leonard Levin. Just like Carl Levin, Senator Carl 
Levin. Yes. He is from the Electric Power Research Institute. 
Welcome. We are happy that you are here today.
    We will ask you to keep your testimony to around 5 minutes. 
If you get up over 15 minutes, I will probably gavel you down, 
so stay fairly close to 5 minutes. We would be grateful.
    Ms. Keating, I don't know if there is anyone in the 
audience you would like to introduce, but I see a couple of 
guys back there that I think you brought along. We are glad 
they are here, too. Ms. Keating, you are recognized.

  STATEMENT OF MARTHA HASTAY KEATING, ASSOCIATE IN RESEARCH, 
CHILDREN'S ENVIRONMENTAL HEALTH INITIATIVE, NICHOLAS SCHOOL OF 
      THE ENVIRONMENT AND EARTH SCIENCES, DUKE UNIVERSITY

    Ms. Keating. Thank you, Mr. Chairman, and thank you for the 
occasion to address the subcommittee this morning.
    Senator Carper. Are they brothers, the two in the audience 
that I alluded to?
    Ms. Keating. My husband, Art Keating, is here with me 
today, as well as my son Tim. He is hoping to get some extra 
credit on civics.
    [Laughter.]
    Senator Carper. Which is the husband?
    Ms. Keating. My sister, Mary Jane Medeiros.
    Senator Carper. All right. Good. This is a family affair. 
Welcome.
    Ms. Keating. Thank you again for the invitation. My name is 
Martha Keating. I am an associate in research with Duke 
University's Children's Environmental Health Initiative. 
However, my testimony today reflects only my views.
    Humans are exposed to methylmercury almost exclusively from 
eating fish and shellfish. The primary source of this 
contamination is industrial mercury emissions, which ultimately 
deposit from the atmosphere to land in water, where they are 
converted by bacteria to methylmercury. Methylmercury readily 
bio-accumulates in the aquatic food chain to levels that make 
the fish unsafe for humans and wildlife to eat.
    Forty-four States currently have fish consumption 
advisories for mercury contamination. According to EPA's latest 
estimates, coal-fired powerplants are responsible for more than 
45 percent of the country's industrial mercury emissions. 
Children are the most vulnerable to mercury's effects, whether 
exposed in utero or as young children, because methylmercury 
disrupts the developing brain. Mercury's effects may manifest 
in school age children as vision and hearing difficulties, 
delays in language acquisition and fine motor skills, lower IQ, 
and memory and attention deficits. These effects translate into 
a wide range of learning difficulties in the classroom.
    There is also evidence that exposure to methylmercury can 
have adverse effects on the developing and adult cardiovascular 
system. Based on blood monitoring data collected by the Centers 
for Disease Control, an estimated 200,000 to 400,000 children 
born in the United States each year have been exposed to 
mercury levels in utero high enough to put them at risk of 
neurological effects.
    To address powerplant mercury emissions, EPA developed the 
Clean Air Mercury Rule, or CAMR. However, CAMR is so legally 
suspect in its cap and trade approach that dozens of 
environmental groups and States have filed lawsuits, and so 
lenient in its emission caps and time frames that 22 States 
have developed programs that are more stringent.
    Two investigations by EPA's Inspector General, one by the 
Government Accountability Office, and two reviews by the 
Congressional Research Service all have highlighted serious 
deficiencies in EPA's analyses. The fact that this subcommittee 
is holding this hearing 2 years after issuance of the final 
rule illustrates the degree to which EPA has failed in its 
mission.
    A legislative approach integrating requirements for all of 
the major pollutants submitted by powerplants would address 
many of CAMR's shortcomings by incorporating the following for 
mercury: a stringent national cap, accompanied by a percent 
reduction requirement or efficiency-based emission rate at each 
boiler; the same emission rates for each coal type; time frames 
that are realistic, but tight enough to encourage technology 
development and innovation; regulatory flexibility in the form 
of averaging times and safe harbor provisions; and a national 
monitoring program and residual risk analysis.
    Why not a cap and trade program for mercury? A cap and 
trade approach allows facilities to purchase mercury pollution 
credits, instead of reducing their emissions. The question, 
then, is whether a regulatory scheme that does not require all 
sources to reduce emissions will improve local hotspots or 
worsen them.
    The Agency's argument that hotspots are unlikely to occur 
relies on computer modeling and prior experience with 
SO2 trading. However, SO2 emissions from 
powerplants are regulated by at least five other regulatory 
programs under the Clean Air Act, not just the trading program, 
but no such minimum standards exist as a backstop in the 
mercury cap and trade rule.
    Further, EPA's computer modeling results are not supported 
by monitoring studies. A comprehensive study in Steubenville, 
OH and a 10-year study of hotspots in the Northeast measured 
mercury deposition at levels significantly higher than EPA's 
modeled estimates for the same areas. The bottom line is that 
mercury emissions from powerplants do affect local ecosystems 
and local hotspots.
    And lastly, multi-year studies in Wisconsin, Florida and 
Massachusetts found that fish mercury levels decline rapidly in 
response to local reductions in mercury emissions, thus 
bolstering the case for States to either impose more stringent 
mercury limits or for Congress to unify this patchwork of State 
laws with comprehensive legislation.
    Thank you again for the opportunity to testify.
    [The prepared statement of Ms. Keating follows:]
 Statement of Martha Hastay Keating, Associate in Research, Children's 
Environmental Health Initiative, Nicholas School of the Environment and 
                    Earth Sciences, Duke University

                              Introduction

    Mr. Chairman and distinguished members of the Subcommittee--thank 
you for the invitation to address the Subcommittee this morning. My 
name is Martha Keating and I am an Associate in Research with Duke 
University's Children's Environmental Health Initiative. However, my 
testimony today reflects only my views. My interest in testifying stems 
from many years of working on mercury issues, first as an EPA scientist 
where I was the project director for the Agency's 1997 Report to 
Congress on Mercury. From 1998 until October of 2006, I was a 
scientific consultant to numerous environmental advocacy groups on 
mercury regulatory issues and represented these groups as a member of 
the EPA's Utility MACT Working Group. My comments this morning will 
address mercury health effects, the EPA's Clean Air Mercury rule, and 
my thoughts on federal legislation.

                     MERCURY AND FISH CONTAMINATION

    Outside of occupational settings, methylmercury is the most toxic 
form of mercury to which humans are regularly exposed and methylmercury 
exposure is almost exclusively from eating fish and shellfish. The 
primary source of methylmercury in fish and shellfish is the 
atmosphere.
    From the atmosphere, mercury is ultimately is deposited to land and 
water where it can be converted by bacteria to methylmercury, a form 
that is especially toxic to humans and wildlife. Fish absorb 
methylmercury from the water as it passes over their gills and as they 
feed on plants and other organisms. As larger fish eat contaminated 
prey, methylmercury concentrations increase in the bigger fish, a 
process known as bioaccumulation. The concentration of methylmercury in 
these fish can be up to 10 million times higher than the surrounding 
water and reach levels that make the fish unsafe for humans and 
wildlife to consume. Elevated levels of methylmercury in fish have 
prompted concerns about the public health hazards from methylmercury 
exposure. Despite the known nutritional and health benefits from eating 
fish, in 2004, public health agencies in 44 states issued fish 
consumption advisories warning citizens to limit how often they eat 
certain types of fish because the fish are contaminated with high 
levels of mercury.\1\ According to EPA's latest estimates, coal-fired 
powerplants are responsible for more than 45 percent of the country's 
industrial mercury emissions.\2\
---------------------------------------------------------------------------
    \1\ http://www.epa.gov/waterscience/fish/advisories/
fs2004.html#synopsis
    \2\ U.S. EPA, 2002 National Emissions Inventory. http://
www.epa.gov/ttn/chief/eiinformation.html
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                  MERCURY EXPOSURE AND HEALTH EFFECTS

    Methylmercury is a neurotoxin--a substance that damages, destroys, 
or impairs the functioning of nerve tissue. It poses the greatest 
hazard to the developing fetus. It passes easily through the placenta 
and impairs the development of the brain and nervous system. Prenatal 
methylmercury exposure from maternal consumption of fish can cause 
later neurodevelopmental effects in children.\3\ Infants appear normal 
during the first few months of life, but later display subtle effects. 
These effects include poor performance on neurobehavioral tests, 
particularly on tests of attention, fine motor function, language, 
visual-spatial abilities (e.g., drawing) and memory. These children 
will likely have to struggle to keep up in school and might require 
remedial classes or special education.\4\
---------------------------------------------------------------------------
    \3\ Committee on the Toxicological Effects of Methylmercury. Board 
on Environmental Studies and Toxicology. Commission on Life Sciences. 
National Research Council. Toxicological Effects of Methylmercury, 
2000. National Academy Press. Online. Available: http://www.nap.edu/
books/0309071402/html/
    \4\ Committee on the Toxicological Effects of Methylmercury. Board 
on Environmental Studies and Toxicology. Commission on Life Sciences. 
National Research Council. Toxicological Effects of Methylmercury, 
2000. National Academy Press. Online. Available: http://www.nap.edu/
books/0309071402/html/
---------------------------------------------------------------------------
    Methylmercury exposure prior to pregnancy is as critical as 
exposure during pregnancy because methylmercury stays in the body for 
months and is slowly excreted. Many of the critical stages of brain and 
nervous system development occur during the first two months after 
conception and since many women do not know they are pregnant during 
that time, the fetus may be exposed to high levels of methylmercury. 
Because of the risk methylmercury poses to the developing fetus, women 
of childbearing age (i.e., 15 to 44 years of age) who might become 
pregnant and pregnant women are the most important members of the 
population in terms of mercury exposure.\5\
---------------------------------------------------------------------------
    \5\ U.S. EPA, 1997b. Mercury Study Report to Congress, Volume VII: 
Characterization of Human and Wildlife Risks from Mercury Exposure in 
the United States. EPA-452/R-97-009
---------------------------------------------------------------------------
    Infants and children are also at risk. Infants may ingest 
methylmercury from breast milk and children are exposed through their 
diet. Children and infants may be more sensitive to the effects of 
methylmercury because their nervous systems continue to develop until 
about age 16. Children also have higher methylmercury exposures than 
adults because a child eats more food relative to his or her body 
weight than an adult does. As a result, they have a higher risk for 
adverse health effects.\6\
---------------------------------------------------------------------------
    \6\ U.S. EPA, 1997b. Mercury Study Report to Congress, Volume VII: 
Characterization of Human and Wildlife Risks from Mercury Exposure in 
the United States. EPA-452/R-97-009
---------------------------------------------------------------------------
    Based on blood monitoring data collected by the National Health and 
Nutrition Examination Survey (administered by the Centers for Disease 
Control and Prevention), an estimated 200,000 to 400,000 children born 
in the United States each year have been exposed to mercury levels in 
utero high enough to put them at risk of neurological effects.\7\
---------------------------------------------------------------------------
    \7\ Hightower, J.M., A. O'Hare, G.T. Hernandez, 2006. Blood mercury 
reporting in NHANES: Identifying Asian, Pacific Islander, Native 
American, and multiracial groups. Environmental Health Perspectives, 
Volume 114, Number 2, February.
---------------------------------------------------------------------------
    What do these staggering numbers mean for childhood development, 
for our education system and for our society? Developmental and 
learning disabilities, including loss of IQ points, have negative 
impacts not only on individuals, but also have long-term consequences 
for the population and society as a whole.\8\ Chemical contamination of 
the brain affects not only the educational attainment, economic 
performance and income of the individual, but it also has an impact on 
the performance of the economy as a whole by affecting society's 
potential production, rate of technical progress, and overall 
productivity.\9\
---------------------------------------------------------------------------
    \8\ Muir, T. and M. Zegarac, 2001. Societal costs of exposure to 
toxic substances: economic and health costs of four case studies that 
are candidates for environmental causation. Envr. Health Perspect. 
Volume 109, Sup. 6, pp. 885-903. December.
    \9\ Muir, T. and M. Zegarac, 2001. Societal costs of exposure to 
toxic substances: economic and health costs of four case studies that 
are candidates for environmental causation. Envr. Health Perspect. 
Volume 109, Sup. 6, pp. 885-903. December.
---------------------------------------------------------------------------
    Lowered IQ has a documented relationship with economic outcomes 
such as lifetime earnings.\10\ Even small decrements in IQ have been 
linked with lower wages and earnings. Two recent studies have attempted 
to calculate the societal cost of methylmercury exposure in the U.S. 
and the related economic benefits of reducing such exposure. The Center 
for Children's Health and the Environment at the Mt. Sinai School of 
Medicine concluded that exposure to methylmercury causes lifelong loss 
of intelligence in hundreds of thousands of American babies born each 
year. This loss of intelligence exacts a significant economic cost to 
American society--a cost that they estimate to be in the hundreds of 
million dollars each year.\11\
---------------------------------------------------------------------------
    \10\ Muir, T. and M. Zegarac, 2001. Societal costs of exposure to 
toxic substances: economic and health costs of four case studies that 
are candidates for environmental causation. Envr. Health Perspect. 
Volume 109, Sup. 6, pp. 885-903. December.
    \11\ Trasande, L., P. Landrigan and C. Schechter, 2005. Public 
health and economic consequences of methylmercury toxicity to the 
developing brain. Environ Health Perspect: doi:10.1289/ehp.7743. 
[Online 28 February 2005] http://ehp.niehs.nih.gov/docs/2005/7743/
abstract.html
---------------------------------------------------------------------------
    In a different study, the Northeast States for Coordinated Air Use 
Management (NESCAUM) in collaboration with the Harvard School of Public 
Health quantified how decreasing mercury emissions from coal-fired 
powerplants would result in less methylmercury exposure and 
consequently, IQ point gains for the population of children born each 
year.\12\ According to this study, a 70 percent decrease in coal-fired 
powerplant mercury emissions by 2018 would result in benefits to 
society of between $119 million to $288 million every year. 
Consequently, a reduction in emissions of more than 70 percent would 
result in even greater benefits. Extrapolating these results, a 90 
percent reduction in emissions would result in benefits to society 
worth more than $370 million per year.
---------------------------------------------------------------------------
    \12\ Northeast States for Coordinated Air Use Management. Economic 
valuation of human health benefits of controlling mercury emissions 
from U.S. coal-fired powerplants. February, 2005.
---------------------------------------------------------------------------
    Effects on IQ however, may be just the tip of the iceberg\13\. A 
lower IQ may be the easiest to quantify and put a dollar value on, but 
this effect may not be the most serious in terms of life and career 
outcomes. Toxicants like methylmercury that affect the nervous system, 
alter a person's ability to plan, organize, and initiate ideas and 
which may induce problems with attention, distractibility, impulsive 
behavior and inability to handle stress and disappointments. These 
effects could be far more serious with respect to success in school and 
life.\14\
---------------------------------------------------------------------------
    \13\ Axelrad, D.A., D.C. Bellinger, L.M. Ryan, and T.J. Woodruff, 
2007. Dose-response relationship of prenatal mercury exposure and IQ: 
An integrative analysis of epidemiologic data. Environ Health 
Perspect.; 115(4): 609-615.
    \14\ Muir, T. and M. Zegarac, 2001. Societal costs of exposure to 
toxic substances: economic and health costs of four case studies that 
are candidates for environmental causation. Envr. Health Perspect. 
Volume 109, Sup. 6, pp. 885-903. December.
---------------------------------------------------------------------------
    There is also evidence in humans and animals that exposure to 
methylmercury can have adverse effects on the developing and adult 
cardiovascular system, blood pressure regulation, heart-rate 
variability, and heart disease.\15\ The benefit of reducing these 
adverse health outcomes has been estimated to be in the billions of 
dollars.\16\
---------------------------------------------------------------------------
    \15\ U.S. EPA, 1997b. Mercury Study Report to Congress, Volume VII: 
Characterization of Human and Wildlife Risks from Mercury Exposure in 
the United States. EPA-452/R-97-009.
    \16\ Northeast States for Coordinated Air Use Management. Economic 
valuation of human health benefits of controlling mercury emissions 
from U.S. coal-fired powerplants. February, 2005.
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                      EPA'S CLEAN AIR MERCURY RULE

    It was public health impacts that concerned Congress when in the 
1990 amendments to the Clean Air Act EPA was directed to investigate 
mercury and other hazardous air pollutant emissions from coal-fired 
utility plants, and to determine whether regulation of these pollutants 
was appropriate and necessary. As you know, EPA has since ``revised'' 
its positive regulatory finding, removed coal-fired utility boilers 
from the list of source categories that emit hazardous air pollutants, 
and finalized a cap and trade rule. The paper trail in the docket for 
this rule revealed:
     EPA's verbatim use of language from industry memoranda in 
numerous sections of the Federal Register notice to justify regulatory 
decisions,
     the emission limits in the rule were pre-selected by EPA 
management to mirror the caps in President Bush's Clear Skies 
Initiative, and
     EPA's models estimated that only a 50 percent reduction in 
emissions would occur by 2020, not a 70 percent reduction by 2018 as 
claimed by the Agency.
    Two reports by EPA's Inspector General concluded that EPA's 
regulatory process was ``compromised'', there was a lack of 
transparency in the regulatory process, and that EPA did not fully 
analyze the rule's impacts on children's health.\17\ The IG also found 
that the EPA did not fully address the potential for hotspots and has 
no plan in place to monitor for such hotspots.\18\ A report by the 
Government Accountability Office highlighted serious deficiencies in 
EPA's cost-benefit analysis of mercury control options.\19\ The 
Congressional Research Service questioned why the proposed rule was not 
more stringent given that the benefits of the rule far outweighed the 
costs\20\, and in a follow-up report wondered exactly what EPA's 
estimated control costs even represent given that so few mercury 
control installations were predicted.\21\
---------------------------------------------------------------------------
    \17\ U.S. EPA, 2005. Office of Inspector General. Additional 
analyses of mercury emissions needed before EPA finalizes rules for 
coal-fired electric utilities. 2005-P-00003, February 3, 2005.
    \18\ U.S. EPA, 2006. Office of Inspector General. Monitoring needed 
to assess impact of EPA's Clean Air Mercury Rule on potential hotspots. 
2006-P-00025, May 15, 2006.
    \19\ U.S. Government Accountability Office, 2005. Observations on 
EPA's cost-benefit analysis of its mercury control options. GAO-05-252. 
www.gao.gov/cgi-bin/getrpt?GAO-05-252.
    \20\ Congressional Research Service, 2005. Mercury emissions from 
electric generating units: A review of EPA analysis and MACT 
determination. CRS Report RL 32744, January 21, 2005.
    \21\ Congressional Research Service, 2006. Mercury emissions from 
electric powerplants: An analysis of EPA's cap-and-trade regulations. 
CRS Report RL 32868, January 13, 2006.
---------------------------------------------------------------------------
    Two years have already passed since EPA finalized the Clean Air 
Mercury Rule. However, CAMR is so legally suspect in its cap and trade 
approach that dozens of environmental groups and states have filed 
lawsuits, and so lenient in its emission caps and timeframes that 22 
states have developed programs that are more stringent. This patchwork 
approach is the wrong one for a national problem, especially for a 
pollutant where emissions from one state may affect citizens in other 
states. The fact that the Subcommittee is holding this hearing 
illustrates the degree to which EPA has failed in its mission.

                         A LEGISLATIVE SOLUTION

    A legislative approach that integrates requirements for all of the 
major pollutants emitted by powerplants would address many of the 
shortcomings of CAMR rule by including the following requirements for 
mercury:
     A stringent national cap accompanied by a percent 
reduction requirement or efficiency-based emission rate at each boiler.
     The same emission rates for all coal types, not more 
lenient standards for our nation's most polluting coals.
     Timeframes that are realistic, but tight enough to 
encourage technology development and innovation, not a wait-and-see 
attitude.
     Regulatory flexibility in the form of averaging times and 
safe harbor provisions.
     A requirement for EPA to assess the effectiveness of the 
standard both through a national monitoring program and residual risk 
analysis.

                       HOTSPOTS AND CAP-AND-TRADE

    Why not a cap and trade program for mercury? First, let's set aside 
questions of whether a cap and trade program for mercury is legal under 
the Clean Air Act, or whether such a program is prudent public health 
policy for a persistent, bioaccumulative neurotoxicant. A concern with 
this approach is that some facilities will not reduce their mercury 
emissions, preferring instead to purchase mercury pollution credits. 
Thus, emissions at a given facility might stay the same or even 
increase. The public health and environmental question then is whether 
mercury hotspots (areas of high mercury deposition, or water quality 
parameters that favor mercury methylation and high levels of mercury in 
biota) exist today, and whether a regulatory scheme that does not 
require all sources to reduce emissions will improve these areas or 
worsen them.
    The Agency's argument that hotspots are unlikely to occur relies on 
prior experience under the Clean Air Act's sulfur dioxide trading in 
the Acid Rain program. However, the Clean Air Mercury Rule is not 
comparable to the Acid Rain program. Sulfur dioxide emissions from 
powerplants are regulated by at least 5 other regulatory programs under 
the Clean Air Act, not the trading program alone (for example, National 
Ambient Air Quality Standards, New Source Review, New Source 
Performance Standards, Prevention of Significant Deterioration, and 
haze rules). No such minimum standards exist as a back-stop in the 
mercury cap-and-trade rule.
    The EPA also relies on the results of a computer model that 
predicts that much of the mercury emitted from a given facility 
disperses into the atmosphere and does not deposit in the local 
vicinity, thus there is no risk of hotspots either occurring or 
becoming worse. However, EPA's computer modeling results are not 
supported by monitoring results. A comprehensive multi-year EPA-funded 
study in Steubenville, Ohio measured the amount of local deposition 
that can be attributed to local coal-burning sources. Contrary to EPA's 
results that most mercury deposition in the U.S. is from global 
sources, not local sources, the Steubenville study found that in an 
area dominated by coal-fired powerplants, 70 percent of the mercury 
deposition could be attributed (by taking measurements, not by computer 
modeling) to local sources.\22\ These findings are particularly 
significant because not only do these findings contradict the computer 
modeling EPA used in developing the Clean Air Mercury Rule,\23\ they 
highlight the potential for reducing local and regional mercury 
deposition by controlling local sources.
---------------------------------------------------------------------------
    \22\ Keeler, G.J., M.S. Landis, G.A. Norris, E.M. Christianson and 
J.T. Dvonch, 2006. Sources of mercury wet deposition in Eastern Ohio, 
USA. Environ, Sci, Tech, 40, 5874-5881.
    \23\ U.S. EPA, 2005. Technical Support Document for the Final Clean 
Air Mercury Rule: Air Quality Modeling. Downloaded from: http://
www.epa.gov/ttn/atw/utility/aqm--oar-2002-0056-6130.pdf
---------------------------------------------------------------------------
    Further, in a just completed 10-year study of hotspots in the 
northeastern U.S. and southern Canada, researchers found numerous 
instances of wildlife with blood mercury levels high enough to be 
poisonous and one hotspot in New Hampshire, downwind of several coal-
fired powerplants with mercury deposition five times higher than EPA's 
modeled estimates for the same area.\24\ Given the extent of mercury 
fish contamination across the country, we can reasonably assume that 
other such deposition hotspots exist. Therefore, the nation as a whole 
will not benefit from a cap and trade rule that reduces mercury 
emissions in some locations, but not all.
---------------------------------------------------------------------------
    \24\ Evers, D. and Charles Driscoll. ``The Danger Downwind'', New 
York Times, Op-Ed, April 26, 2007.
---------------------------------------------------------------------------
    Addressing the question of how fish concentrations respond to 
reductions in mercury emissions and deposition are multiyear studies in 
Wisconsin, Florida, and Massachusetts. These field studies correlated 
control of local emission sources with decreases in mercury deposition 
and subsequent reductions in fish mercury concentrations. Notably, in 
each case, the reductions in fish tissue concentrations were far 
greater and occurred much faster than scientists thought the reductions 
would occur. In fact, research now shows that newly deposited mercury 
is more reactive in the environment than previously deposited mercury. 
Thus, aquatic systems can respond rapidly to changes (e.g., decreases) 
in mercury deposition.25,}26 In Wisconsin, researchers found 
that changes in atmospheric mercury deposition had rapid effects on 
fish mercury concentrations.\27\ A 10 percent decline in mercury 
deposition correlated with a 5 percent decline in fish mercury 
concentration over a period of 1 year. Researchers measured a 30 
percent decline in fish mercury concentration over a 6-year period.
---------------------------------------------------------------------------
    \25\ Hintellmann, H., et al. 2002. Reactivity and Mobility of New 
and Old Mercury Deposition in a Boreal Forest Ecosystem during the 
First Year of the METAALICUS Study. Environmental Science & Technology 
36(23):5034-40.
    \26\ Bariarz, C.L., et al. 2003. A Hypolimnetic Mass Balance of 
Mercury From a Dimictic Lake: Results from the METAALICUS Project. 
Journal De Physique IV 107:83-6.
    \27\ Hrabik, T.R. and C.J. Watras, 2002. Recent declines in mercury 
concentration in a freshwater fishery: isolating the effects of de-
acidification and decreased mercury deposition in Little Rock Lake. The 
Science of the Total Environment, 2002.
---------------------------------------------------------------------------
    In South Florida, local mercury emission rates from waste 
incinerators decreased by more than 90 percent since peaking in the 
late 1980s and early 1990s as a result of pollution prevention and the 
issuance of stringent State emission limits. As a result, mercury in 
the fish and wildlife of the Everglades has declined by more than 75 
percent since the mid-1990's--a recovery that the researchers called 
``remarkable'' (for both the extent of the recovery and how quickly it 
occurred).\28\ From the time emissions started to decrease, it took 
from 6 to 36 months before decreases in largemouth bass mercury 
concentrations were detected.
---------------------------------------------------------------------------
    \28\ Florida Department of Environmental Protection, 2003. 
Integrating atmospheric mercury deposition and aquatic cycling in the 
Florida Everglades: An approach for conducting a Total Maximum Daily 
Load analysis for an atmospherically derived pollutant. Integrated 
Summary: Final Report. October.
---------------------------------------------------------------------------
    While industry critics claim that the results in South Florida are 
not applicable to other parts of the U.S. because of the unique 
attributes of the Everglades system, these results have been duplicated 
in Massachusetts as well. In February 2006, the Commonwealth of 
Massachusetts released the findings from the first 5 years of a multi-
year monitoring effort designed to gauge the effectiveness of mercury 
pollution controls in reducing fish mercury concentrations in local 
lakes.\29\ The study found that declines in fish mercury concentrations 
correlated with the decline in mercury emissions after the installation 
of mercury controls on incinerators in Northeastern Massachusetts. The 
most significant decline in fish mercury concentrations (a decrease of 
about 47 percent from 1999 to 2004) occurred where numerous local point 
sources either ceased operation or achieved substantial reductions in 
mercury emissions.
---------------------------------------------------------------------------
    \29\ Massachusetts Department of Environmental Protection, 2006. 
Massachusetts Fish Mercury Monitoring Studies: Long-Term Monitoring 
Results, 1999-2004. http://www.mass.gov/dep/toxics/stypes/
hgres.htm#monitoring
---------------------------------------------------------------------------
    These studies indicate that fish mercury levels may respond rapidly 
to changes in mercury deposition, thus bolstering the case for either 
States to impose more stringent mercury limits on a tighter timeframe 
than the more lenient federal Clean Air Mercury Rule, or for Congress 
to unify this patchwork of state laws with comprehensive powerplant air 
pollution legislation.
    Thank you again for the opportunity to testify.

     Responses from Martha H. Keating to Additional Questions from 
                            Senator Sanders

    Question 1. The Bush administration argues that one of the reasons 
it has not been as aggressive on regulating domestic sources of mercury 
is because a large portion of the mercury in the U.S. originates from 
global sources. What, if anything, has the Bush administration done in 
the international arena to help or hinder reductions in global sources 
of mercury?
    Response. First, I would like to address the Bush administration's 
argument about the contribution of global sources to mercury deposition 
in the U.S. Scientists agree that mercury deposition in any one 
location is a function of mercury emissions from local, regional, and 
global sources. However, the influence of any one source type (i.e., 
local, regional or global) varies widely by location. In particular, 
domestic mercury sources have been shown to significantly affect 
numerous regions in the country.
     One study estimated that sources within North America 
contributed more than 60 percent of the mercury deposition to sections 
of the northeastern U.S., with northeastern New Jersey estimated to 
receive over 80 percent of its mercury deposition from North American 
sources.\1\
---------------------------------------------------------------------------
    \1\ Seigneur, Christian, K. Vijayaraghavan, K. Lohman, P. 
Karamachandani, and C. Scott, 2004, Global source attribution for 
mercury deposition in the United States, Environ. Sci. Technol., 38, 
555-569.
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     Detailed modeling found that approximately one half to two 
thirds of the mercury deposited to the Great Lakes is emitted by 
sources within the U.S.\2\ For Lake Erie and Lake Ontario, over half of 
the deposition was estimated to originate from sources closer than 
1,000 kilometers from each lake.
---------------------------------------------------------------------------
    \2\ Cohen, Mark, R. Artz, R. Draxler, P. Miller, L. Poissant, D. 
Niemi, D. Ratte, M. Deslauriers, R. Duval, R. Laurin, J. Slotnick, T. 
Nettesheim, and J. McDonald, 2004, in press, Modeling the atmospheric 
transport and deposition of mercury to the Great Lakes, Environmental 
Research.
---------------------------------------------------------------------------
     A comprehensive multi-year EPA-funded study in 
Steubenville, Ohio measured the amount of local deposition that can be 
attributed to local coal-burning sources. The Steubenville study found 
that in an area dominated by coal-fired powerplants, 70 percent of the 
mercury deposition could be attributed (by taking measurements, not by 
computer modeling) to local sources.\3\
---------------------------------------------------------------------------
    \3\ Keeler, G.J., M.S. Landis, G.A. Norris, E.M. Christianson and 
J.T. Dvonch, 2006. Sources of mercury wet deposition in Eastern Ohio, 
USA. Environ, Sci, Tech, 40, 5874-5881.
---------------------------------------------------------------------------
    In a just completed 10-year study of hotspots in the northeastern 
U.S. and southern Canada, researchers found numerous instances of 
wildlife with blood mercury levels high enough to be poisonous and one 
hotspot in New Hampshire, downwind of several coal-fired powerplants 
with mercury deposition five times higher than EPA's modeled estimates 
for the same area.\4\
---------------------------------------------------------------------------
    \4\ Evers, D. and Charles Driscoll. ``The Danger Downwind'', New 
York Times, Op-Ed, April 26, 2007.
---------------------------------------------------------------------------
    These and other studies\5\, \6\ indicate that, in general, regions 
in the U.S. with the highest mercury deposition are the same regions 
where local and regional sources make significant contributions to the 
total mercury load.
---------------------------------------------------------------------------
    \5\ Bullock, O. R., K. A. Brehme, and G. R. Mapp, 1998, Sci. Total 
Environ., 213,1. Dvonch, J., J. Graney, G. Keeler, and R. Stevens, 
1999, Use of elemental tracers to source apportion mercury in South 
Florida precipitation, Environ. Sci. Technol, 33, 4522-4527.
    \6\ Florida Department of Environmental Protection, 2003, http://
www.dep.state.fl.us/secretary/news/2003/nov/pdf/mercury--report.pdf
---------------------------------------------------------------------------
    Thus, U.S. emissions are responsible for a significant part (or, in 
some areas, an overwhelming part) of the U.S. deposition problem.
    Given the Administration's position that it is largely global 
sources of mercury that are impacting the U.S., one would be inclined 
to think that the Administration would be fully supportive of binding 
international agreements that would require reductions in mercury 
emissions worldwide. Unfortunately, this has not been the case. The 
Administration has consistently argued against any agreements to reduce 
emissions if the agreement included binding targets.
    The U.S. Government has focused its work on global mercury largely 
through participation in UNEP (United Nations Environment Program) 
deliberations. UNEP has made mercury a priority since it issued a 
Global Mercury Assessment in 2003. Unfortunately, our government's 
participation has not been constructive; to the contrary, it has 
opposed efforts by the European Union, Norway and Switzerland, and 
other countries to develop a coordination global mercury reduction 
plan. It has vehemently resisted development of a binding treaty like 
the Persistent Organic Pollutants (POPs) treaty to reduce the use of 
this toxic metal. It has even resisted the development of quantitative 
reduction goals (aspirational goals) to guide activities around the 
world.
    EPA and the State Department have promoted voluntary partnerships 
as the sole mechanism to achieve mercury reduction goals. Although 
there is nothing wrong with voluntary initiatives per se, they need to 
be designed carefully and quite deliberately in order to achieve any 
progress. Partnerships to date have been the opposite; there are no 
quantitative reduction goals, no identification of key affected parties 
for membership, or any other measures that would measure progress. UNEP 
has recently renewed efforts to revitalize these partnerships with the 
hope that they may someday contribute to actual mercury reductions, but 
this optimism is surely a triumph of hope over experience; to date the 
performance of these partnerships has been dismal.
    Most recently, EPA has taken a stand on legislation introduced in 
both the House of Representatives and the Senate to ban the export of 
surplus mercury into commerce. This initiative is quite similar to an 
initiative in the European Union and is widely considered one of the 
most important things that industrialized nations can do to reduce 
mercury use in global commerce. EPA did not strongly oppose the bill, 
but chose to focus on a series of hypothetical problems that the 
legislation could inadvertently trigger. The bottom line of the EPA 
testimony was that we should focus on reducing demand instead of 
supply, a position that was contradicted by both ECOS (Environmental 
Council of State Governments) and the national environmental community 
who testified at the same hearing. It is also a position that 
contradicts the recent UNEP declaration on mercury, which called for 
reductions of both supply and demand at the same time in order to 
reduce mercury use and pollution.

    Question 2. EPA declared in it final mercury rules for powerplants 
that it was not only ``unnecessary'' but also ``inappropriate'' to 
regulate mercury emissions from powerplants under the Clean Air Act's 
stringent air toxics provisions in section 112. Hasn't EPA long 
regulated mercury from other types of industries, however, under this 
same stringent Clean Air Act authority? And, if so, what has the 
experience been there? Does it make sense to you that it is appropriate 
to regulate mercury emissions from some types of industries using the 
law's most protective tools, but ``inappropriate'' to do so when it 
comes to powerplants?
    Response. Section 112(d) of the 1990 Clean Air Act amendments 
requires the application of Maximum Achievable Control Technology 
(MACT) to major sources of hazardous air pollutants. Congress provided 
the list of hazardous air pollutants (which includes mercury and 
compounds) and EPA devised the list of major source categories. (EPA 
added coal-fired electric steam generating units to the source category 
list in December 2000, and then summarily de-listed them in March 2005 
under the Clean Air Mercury Rule.) Had EPA adhered to the mandates of 
section 112(d) since 1990, there would be numerous success stories to 
report. However, the Agency has been only partially successful in 
reducing mercury emissions using the authority of this section. For 
example, the Agency did issue substantive MACT standards limiting 
mercury emissions from hazardous waster incinerators (a source category 
that includes commercial and onsite incinerators, cement kilns burning 
hazardous waste, lightweight aggregate kilns, and boilers). On the 
other hand, EPA's MACT standard for cement kilns not burning hazardous 
waste took the position that maximum achievable control technology was 
``no control''--an approach that has since been rejected by the courts. 
The MACT standard for industrial, commercial, and institutional boilers 
results in a paltry 17 percent reduction in mercury emissions. Overall, 
the Agency's record under section 112(d) is mixed.
    The Agency's true success stories in regulating mercury emissions 
are the standards for medical waste incinerators and municipal waste 
combustors. Each of these rules required about a 90 percent reduction 
in mercury emissions, and in practice, far higher reductions have been 
achieved. While these standards were issued under section 129 of the 
1990 amendments, it is noteworthy that the statutory language of CAA 
section 129 is identical to the MACT requirements of section 112(d).
    The success of these standards in reducing mercury emissions can 
largely be attributed to the use of activated carbon injection at these 
sources. Numerous opponents of stringent regulations for coal-fired 
powerplants consistently point out that mercury control at waste 
combustors are so efficient because these units can operate at lower 
temperatures, have a smaller volume of stack gas to treat, and have 
higher a higher chlorine content in the waste than is present in the 
coal. All of these factors contribute to high capture rates of mercury 
in waste combustor stack emissions. I agree with each of these points. 
This does not mean however that the same technology cannot achieve 
equivalent capture rates at coal-fired powerplants. The emissions data 
from full-scale tests of the latest technologies (including halogenated 
carbon and other advancements) continue to demonstrate that mercury can 
be reduced efficiently and affordably at powerplants.
    EPA had the same concerns about the reliability and efficiency of 
technology when the municipal waste combustor rule was developed. In 
fact, the Agency had test data from only two combustor facilities, 
compared to the dozens that are available today for coal-fired 
powerplants. To address this uncertainty, EPA included a safe harbor 
provision in the combustor rules that allowed for a different emission 
limit if the technology did not perform as designed. A similar approach 
could certainly be taken for coal-fired powerplants. To date, not a 
single medical waste incinerator or municipal waste combustor has 
needed the safe harbor provision.
    Finally, as I submitted previously, I believe that the cap and 
trade approach for regulating mercury emissions from coal-fired 
powerplants is inappropriate. A multipollutant legislation that 
includes a stringent national cap with emission limits at each boiler, 
a reasonable timeframe, and regulatory flexibility in the form of a 
safe harbor provision, would address the many shortcomings in EPA's 
Clean Air Mercury Rule.

    Senator Carper. Ms. Keating, thank you so much.
    Mr. Pipitone, welcome.
    Senator Voinovich, this fellow is from Akron, OH.

    STATEMENT OF GUY L. PIPITONE, SENIOR VICE PRESIDENT OF 
 OPERATIONS, STRATEGY, AND DEVELOPMENT, FIRSTENERGY CORPORATION

    Mr. Pipitone. Thank you, Mr. Chairman, Senator Voinovich. 
My name is Guy Pipitone. I am senior vice president, 
Operations, Strategy and Development for the FirstEnergy 
Corporation, which is headquartered in Akron, OH. We are a 
diversified energy company.
    I have been with the company for more than 30 years, the 
majority of that time spent on the powerplant side of our 
operations. We believe that one of the promising mercury 
removal technologies out there is electro-catalytic oxidation, 
or we refer to it as ECO for short. It is a multi-pollutant 
removal process that has been developed by a New Hampshire-
based energy company, a technology company named Powerspan. 
FirstEnergy has a 25 percent interest in Powerspan, and I have 
served on Powerspan's board of directors since 1998.
    Another major supporter of the ECO process has been the 
Ohio Coal Development Office. They have contributed $5.5 
million towards the development of this technology.
    Powerspan has been operating in an ECO commercial 
demonstration unit at FirstEnergy's R.E. Burger Plant, which is 
located on the Ohio River near Shadyside, OH. That plant has 
been operating for 3 years now. ECO has proven to be effective 
in reducing sulfur dioxide, mercury, fine particulate, and 
nitrogen oxides. We have ordered a 325 megawatt ECO unit for 
installation on our system, and it is scheduled for startup in 
the first quarter of 2011.
    The ECO process works by sending an electrical charge into 
a proprietary reactor, and this reactor oxidizes the 
pollutants, including mercury. Next an ammonia-based scrubber 
is used to capture the oxidized gaseous pollutants. The 
byproduct from the ECO process passes through a highly 
efficient carbon filter to remove most of the remaining mercury 
before it is crystallized into ammonium sulfate fertilizer, 
which is a very marketable byproduct.
    Our test results over these past 3 years have shown ECO's 
mercury removal rate to average about 83 percent. However, with 
additional design refinements, a 90 percent removal rate may be 
achievable. By comparison, at our Bruce Mansfield Plant in 
Pennsylvania, about 85 percent of the mercury is removed by the 
combination of our SCR and scrubber systems that are installed 
there.
    Since Powerspan's ECO unit began operating at Burger in 
2004, a number of coals and coal blends have been tested. The 
fuels ranged from 100 percent high sulfur eastern bituminous 
coal, to 80 percent Powder River Basin with a 20 percent 
eastern coal blend. The testing indicates that as long as the 
coal blend is 20 percent or more of eastern bituminous fuel, 
over 80 percent of the mercury will be removed.
    We haven't done testing at the plant with 100 percent 
Powder River Basin, but Powerspan's laboratory testing of the 
western fuels at 100 percent show that about 50 percent to 65 
percent of the mercury is removed for 100 percent Powder River 
Basin.
    While we are long time supporters of ECO, we know that it 
has its limitations, as do all of the current pollution control 
technologies that are out there.
    Along with the ECO process, Powerspan is developing an 
exciting carbon capture process, and it is referred to as 
ECO2. The pilot of this system will be installed at 
our R.E. Burger Plant and the goal of this first of a kind 
project is to capture powerplant-generated carbon dioxide, 
transport it to an 8,000 foot deep well that has just been 
drilled, and then sequester that carbon dioxide underground. 
These activities are part of FirstEnergy's participation in the 
multi-year regional carbon sequestration research program that 
is sponsored by the United States Department of Energy.
    The ECO2 pilot program is scheduled to begin by 
either the end of this year, just 7 months or so from now, or 
in the first quarter of 2008. So this is near term. It may be 
the first such program in the world to demonstrate both 
CO2 capture and sequestration at one conventional 
coal-fired powerplant.
    I will conclude my remarks by saying that we have 
determined that ECO is a viable alternative compared with other 
technologies.
    I thank you for the opportunity to talk about FirstEnergy's 
effort in this area.
    [The prepared statement of Mr. Pipitone follows:]

    Statement of Guy L. Pipitone, Senior Vice President, Operations 
              Strategy and Development, FirstEnergy Corp.

    Good morning Mr. Chairman and committee members. My name is Guy 
Pipitone and I am the Senior Vice President, Operations Strategy & 
Development for FirstEnergy, which is a diversified energy company 
headquartered in Akron, Ohio.
    I have been with the company for more than 30 years, with the 
majority of my career spent on the powerplant side of our operations. I 
appreciate the opportunity to testify before this subcommittee 
regarding the current state of mercury technology here in the United 
States.
    We believe that one promising mercury removal technology is the 
Electro-Catalytic Oxidation, or ECO technology, a multi-pollutant 
control system developed by Powerspan, a New Hampshire-based energy 
technology company. FirstEnergy has a 25-percent ownership interest in 
Powerspan, and I have served on its board of directors since 1998.
    Another major supporter of ECO has been the Ohio Coal Development 
Office, a program of the Ohio Air Quality Development Authority. It has 
contributed more than $5.5 million to the project.
    Powerspan has been operating an ECO demonstration system for the 
past three years at FirstEnergy's R.E. Burger Plant, located along the 
Ohio River near Shadyside, Ohio. Through this demonstration, ECO has 
proven to be effective in reducing SO2, mercury, acid gases, 
fine particulate matter, and nitrogen oxides.
    The process works by sending an electrical charge into the 
proprietary ECO reactor that oxidizes pollutants, including mercury. 
Next, an ammonia scrubber is used to capture the oxidized gaseous 
pollutants and SO2. The byproduct from the ECO process then 
passes through a highly efficient carbon filter to remove all of the 
mercury before it is crystallized into ammonium sulfate fertilizer, 
which is a marketable end product. Annually, this filter, with the 
captured mercury, has to be sent to a permitted hazardous waste 
facility. This is ECO's only waste. In other words, this process 
creates a useful fertilizer rather than more landfills.
    Test results have shown ECO's mercury removal rate to average about 
83 percent. However, with additional design and engineering 
refinements, a 90-percent removal rate may be achievable. By 
comparison, FirstEnergy's Bruce Mansfield Plant in Shippingport, 
Pennsylvania was one of the first powerplants in the world to be built 
with scrubbers as original equipment. Our testing indicates that about 
85 percent of the mercury is removed by its selective catalytic 
reduction and scrubber systems.
    Since the ECO unit began operating at Burger in 2004, a number of 
coals and coal blends have been burned in the units supplying the flue 
gas to the ECO unit. The fuels ranged from 100-percent high-sulfur 
eastern bituminous coal, to blends with up to 80-percent low-sulfur 
Powder River Basin western coal.
    The testing indicates that as long as some eastern coal is included 
in the mix, the mercury will be oxidized and can be mostly removed by 
ECO. Laboratory testing also shows that burning 100-percent Powder 
River Basin coal only nets about a 50- to 65-percent mercury removal 
rate through ECO. This is probably because western coal has a high 
percentage of elemental mercury and is low in chlorine. It is chlorine 
that combines with the elemental mercury to produce an oxidized form 
that is easier to remove in the ECO process.
    Throughout the testing process, the Electric Power Research 
Institute has monitored ECO's results. This includes testing of 
pollutant removal, audits of analyzer readings, fertilizer sampling, 
and a reliability study, which concluded that ECO is as reliable as a 
conventional wet flue gas scrubber system.
    While we are long-time supporters of ECO, we know that it has its 
limitations, as do all pollution control technologies. For example, 
some powerplants might not have the physical space to accommodate an 
ECO unit and its associated fertilizer plant.
    Along with ECO's multi-pollutant removal capabilities, Powerspan 
also is developing a carbon capture process--known as ECO2--
that can be added to the existing ECO unit. The goal of this first-of-
a-kind project is to capture powerplant CO2, transport it to 
an 8,000-foot test well that was drilled at the Burger Plant earlier 
this year, and then sequester it underground. These activities are part 
of FirstEnergy's participation in a multi-year regional carbon 
sequestration research program sponsored by the U.S. Department of 
Energy to determine if CO2 can be stored deep underground in 
suitable rock formations.
    The ECO2 pilot program is scheduled to begin by the end 
of this year, or early 2008. The projects will provide an opportunity 
to test an integrated CO2 capture, handling and 
transportation, and injection system at our Burger Plant, which may be 
the first to demonstrate both CO2 capture and sequestration 
at a conventional coal-fired powerplant.
    These all are issues I am sure this committee will debate and 
discuss at length. I will conclude my remarks by saying we have 
determined ECO to be a viable alternative compared with other 
technologies.
    Thank you for the opportunity to talk about FirstEnergy's 
experience with ECO. I'd be pleased to answer your questions at this 
time.

                                 ______
                                 
              Powerspan ECO2 Technology Update

    Powerspan has been working to develop the ECO2 
CO2 capture process in its New Hampshire laboratory. The 
ECO2 process is designed to work in conjunction with the ECO 
multi-pollutant control process. After the incoming flue gas has nearly 
all of the SO2, NOx, mercury and the particulate removed in 
the ECO2 system, it is sent to the ECO2 absorber 
vessel. ECO2 uses an ammonium carbonate reagent absorber and 
regenerator system to capture CO2 in the powerplant flue gas 
stream, strip off the CO2 for final cleanup, compress and 
sell or sequester the CO2 and send the reagent back into the 
ECO system. No additional reagent is used in ECO2 than is 
already used in the ECO system.
    Laboratory results have shown that ECO2 can capture up 
to 90 percent CO2 in the flue gas stream. Measurement 
techniques have been developed to confirm these results. The process is 
continuing to be refined to develop design information for a 1 MW 
ECO2 pilot unit at FirstEnergy's Burger Power Station, where 
a 30 MW demonstration of the ECO system has been in operation for about 
3 years. The ECO pilot is scheduled to be added by the end of 2007, or 
early 2008. It is scheduled to operate at least through 2008, capturing 
approximately 20 tons per day of CO2.
    The captured CO2 is to be permanently sequestered in an 
on-site well recently drilled to a 8,000-foot depth at the Burger Power 
Station as part of the Midwest Regional Carbon Sequestration Project. 
This may be the first project to capture and sequester powerplant 
CO2 in the world.

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    Senator Carper. Mr. Pipitone, thank you for sharing all 
that you are doing there. We look forward to asking you some 
questions about that to follow up.
    All right. Mr. Foerter, welcome.

STATEMENT OF DAVID C. FOERTER, EXECUTIVE DIRECTOR, INSTITUTE OF 
                      CLEAN AIR COMPANIES

    Mr. Foerter. Good morning. My name is David Foerter. I am 
the executive director for the Institute of Clean Air 
Companies. ICAC is a national trade association of nearly 100 
companies that supply air pollution control and monitoring 
technologies for electric powerplants and other stationary 
sources across the United States.
    The industry develops and deploys control technologies for 
all pollutants, including all criteria pollutants, air toxics, 
and greenhouse gases.
    ICAC would like to thank the subcommittee for the 
invitation to talk about the status of control technologies 
today. As you are aware, air pollution control technologies 
follow and respond to regulatory drivers. As you will hear from 
others today, the synergy of State-specific actions and Federal 
requirements create a control technology market with 
considerable certainty as to when and what technologies will be 
needed. ICAC members and the industry at large are responding 
with an ever-increasing suite of technologies to achieve these 
mercury control requirements.
    All powerplants are not created equally. All are engineered 
for specific conditions and needs. Likewise, there is no single 
mercury control technology that will achieve the reductions 
needed for all types of coals and powerplant configurations.
    Rather, there is an expanding suite of control technology 
options being deployed today. In addition, flexibility within 
regulations, including tiered approaches and soft landings or 
safe harbors, are good for technologies, such that the risks 
are reduced and the lower cost options can be developed and 
deployed.
    Today, I am going to focus on two primary options, one a 
mercury-specific injection technology; and the other the 
collection of technologies that integrate to control mercury 
emissions as a collateral or co-benefit when controlling for 
other pollutants.
    In general, the science and understanding of mercury 
control technology has moved rapidly from research through 
development, demonstration, and into full system deployment. We 
have been here before with other pollutants and have already 
applied similar mercury controls on the municipal solid waste 
sources. What is different today is that there is a broader 
range of available control technologies and the experience of 
our industry in deploying these technologies.
    We have also overturned some of the assumptions on sub-
bituminous coal, the western coals, where we thought they 
originally would be more difficult or the most difficult and 
most expensive to control. That has been completely overturned 
in the last couple of years.
    Today, control technology vendors are actively installing 
mercury control systems across the United States, particularly 
in States with more aggressive implementation schedules and 
more stringent requirements than those mandated by Federal 
rule. In 2007, State programs in Massachusetts and New Jersey 
go into effect with systems and control strategies in place to 
meet these requirements.
    Also there will be a few newly built plants that begin 
operation in 2007, and mercury control has been integrated into 
their design. In addition, the combination of installed 
controls designed for NOx control and for SO2 
control already achieve mercury control as part of the 
integrated co-benefits approach. There are reports of high 
performance of megasystems. However, at a minimum all mercury 
control systems are designed to meet the regulatory 
requirements, as well as incorporating any flexibility in 
regulations. Again, technologies follow and respond to the 
regulatory drivers.
    Over the past year, ICAC members reported booking new 
contracts for nearly three dozen coal-fired powerplant boilers. 
These contracts are for new and existing boilers, burning 
bituminous and sub-bituminous coals, with different equipment 
configurations. The commercial sales are the result of Federal 
and State regulations, including new source permit requirements 
under consent decrees. By the end of this year, vendors 
anticipate they will have approximately 50 more orders that 
would come in due to these regulatory drivers.
    As previously reported by ICAC, mercury-specific sorbent 
injection systems became commercially available after being 
demonstrated at full scale on various coal-fired boilers, coal 
types, and mission control equipment configurations. Typically, 
these mercury control systems require relatively small capital 
investments for materials storage handling and delivery 
systems. Initially, the sub-bituminous coals posed the greatest 
challenge to our industry for sorbent injection technology. 
Today, these challenges have been largely overcome and the 
technical challenges are mostly now on bituminous coal systems.
    It is noteworthy that when you have an injection system, a 
sorbent injection system, you can change or tweak that system 
to get different levels of mercury control, by changing the 
types of carbons or the amounts of carbons that are being used 
in them. So the same kind of control technology you might put 
in for 70 percent could also be used for 90 percent.
    It is also noteworthy that while I am discussing activated 
carbon as one technology, there are other different types of 
sorbents that are being developed and deployed.
    It is also evident that significant amounts of mercury are 
being removed from existing control technologies, or the 
collateral benefits. When you combine technologies like the 
particulate and the SO2 and the NOx controls, and 
put them together, you ultimately will get some other types of 
emissions reductions. Although these processes were not 
originally intended, designed nor optimized for mercury 
capture, the collateral mercury control is often sufficient to 
meet current requirements. Because mercury is captured as a co-
benefit from these control technologies, the reductions are 
cost effective.
    Many other powerplants are anticipated to install combined 
controls over the next several years. We have seen some recent 
information from EPA projecting out to 2020 that there will be 
260 gigawatts of power that will be scrubbed, and this is in 
the context of 330 gigawatts of coal-fired power.
    Similarly, for the NOx control, we are looking at about 220 
gigawatts of SCRs by 2020. So there is a lot more of these 
combinations that are coming, and EPA is making those 
predictions.
    Plants are likely to meet the requirements through 
integrated co-benefit approaches, with the potential to add 
additional mercury-specific control technologies as needed. 
Once you have a co-benefit program, you could put in activated 
carbon injection on top of that. There is nothing in the 
science that says you cannot do that. Integrated multi-
pollutant control systems can also be optimized in many ways to 
achieve greater amounts of mercury.
    Senator Carper. Mr. Foerter, you are about 7 minutes into 
your statement. I need to ask you to wrap it up. Senator 
Voinovich has to leave at 12:30, and I just want to make sure 
he has his chance. So could you go ahead and wrap it up?
    Mr. Foerter. Okay. A paragraph or two, and I am done.
    Recognizing the market demand for activated carbons is 
driven by regulations, the industry has been developing more 
carbon. We have a number of different projects. One is the 
largest activated carbon manufacturing facility in the United 
States. It is a $280 million project. It is designed to produce 
50 percent of the activated carbon under any potential rule and 
legislation that is being looked at right now, by 2015. So 
trends are now in the investments being made in those sites in 
Texas, Louisiana and North Dakota. Texas and North Dakota are 
sitting on lignite coal, which is used to produce activate 
carbon.
    So they are looking at about 600 million pounds per year of 
this activated carbon by 2010, and about 1 billion pounds of 
activated carbon by 2015.
    There is an issue of fly ash and commingling with activated 
carbon. It is being addressed. We have a lot of success going 
on there. EPRI, who speaks after me, will talk a little about 
two of their technologies, and we think they have been very 
successful and have a lot of potential for keeping fly ash good 
for other things.
    We are working responsibly with powerplant operators to 
create the reliable mercury control systems that are integrated 
into facility designs.
    I thank you very much for this opportunity.
    [The prepared statement of Mr. Foerter follows:]

    Statement of David C. Foerter, Executive Director, Institute of 
                          Clean Air Companies

    Chairman Carper, Senator Voinovich and Members of the Subcommittee:
    Good morning, my name is David Foerter and I am the Executive 
Director for the Institute of Clean Air Companies (ICAC).
    ICAC is the national trade association of nearly one-hundred 
companies that supply air pollution control and monitoring technologies 
for electric powerplants and other stationary sources across the United 
States. The industry deploys control technologies for all air 
pollutants, including all criteria pollutants, air basics, and 
greenhouse gases.
    ICAC would like to thank Chairman Carper and Senator Voinovich for 
the invitation to participate in the Subcommittee on Clean Air and 
Nuclear Safety hearing on ``The State of Mercury Regulation, Science, 
and Technology.'' It is my privilege to present this testimony on our 
current understanding of mercury control technologies for coal-fired 
powerplants and their application to meet regulatory requirements.
    As you should be aware, air pollution control technologies follow 
and respond to regulatory drivers. As you will hear from others today, 
the synergy of state-specific actions and federal requirements have 
created control technology markets with considerable certainty as to 
when and what technologies will he needed. ICAC members, and the 
industry at large, are responding with an ever increasing suite of 
technologies to achieve these mercury control requirements. All 
powerplants are not created equally; all are engineered for specific 
conditions and needs. Likewise, there is no single mercury control 
technology that will achieve the reductions needed for all coal types 
and for all electric powerplant configurations. Rather, there is an 
expanding suite of control technology options being deployed today. In 
addition, flexibility within regulations including tiered approaches 
are good for technologies such that risks are reduced and lower cost 
options can be developed and deployed. In these comments, I will focus 
on two of the primary control options; one a mercury specific sorbent 
injection technology and the other a collection of technologies 
integrated to control mercury emissions as a collateral, or co-benefit 
when controlling for other pollutants.
    In general, the science and understanding of mercury control 
technology has moved rapidly from research through development, 
demonstration and into full system deployment. The success of this 
rapid progression is the result of strong support from federal and 
public-private partnerships, and the ability of regulators, 
particularly in the states, to enact regulatory programs that harnessed 
the suite of control options in a flexible regulatory framework. For 
example, the strong research and demonstration program conducted 
through the U.S. Department of Energy overturned the previous 
assumption that sub-bituminous coals would be the most difficult and 
expensive to control. Through the demonstration program, the better 
understanding of western, sub-bituminous coals led to successes in 
dramatically reducing the cost of controlling mercury emissions while 
increasing the control effectiveness. Today, technology vendors are 
addressing challenging issues surrounding sorbent injection technology 
as it applies to eastern, bituminous coals, particularly in the 
presence of sulfur trioxides (SO3).
    Today, control technology vendors are actively installing mercury 
control systems across the United States, particularly in states that 
have called for more aggressive implementation schedules and more 
stringent requirements than those mandated by the federal Clean Air 
Mercury Rule. In 2007, state programs in Massachusetts and New Jersey 
go into effect, with systems and control strategies in place to meet 
these requirements. Also a few newly built powerplants begin operation 
in 2007 and mercury control has been integrated into their design. In 
addition, the combination of installed selective catalytic reduction 
(SCR), primarily designed for NOx control, and wet flue gas 
desulfurization (wet FGD), primarily designed for SO2 
control, already achieve mercury control as pan of the integrated co-
benefits approach. There have ve been reports of high performance of 
many systems, however, at a minimum all mercury control systems are 
designed to meet the regulatory requirements as well as any regulatory 
flexibility mechanisms. Typically, technology performance guarantees 
will be written around the performance requirements of regulations.
    Over the last year, ICAC members reported booking new contracts for 
mercury control equipment for nearly thirty-six coal-fired powerplant 
boilers. These contracts are for controlling mercury on new and 
existing boilers, burning bituminous and sub-bituminous coals, with 
different particulate captire equipment such as fabric filters and 
electrostatic precipitators (ESP). The contracts for commercial mercury 
control systems are attributed to federal and state regulations, 
including new source permit requirements and consent decrees, which 
specify high levels of mercury capture. By the end of 2007, vendors 
anticipate approximately another fifty contracts for mercury control 
systems will have been awarded.
    As reported by ICAC as the federal Clean Air Mercury Rule was being 
promulgated and as states prepared their response, and in many cases 
their own programs, mercury specific control technologies such as 
sorbent injection systems have been commercially available after being 
demonstrated at full-scale on various coal-fired boilers, coal types, 
and emissions control equipment configurations. Typically, these 
mercury control systems require relatively small capital investments 
for material storage, handling and delivery systems. Initially, sub-
bituminous coals posed the greatest challenge for sorbent injection 
technology. Today these challenges have been largely overcome, and the 
technical challenges are mostly for bituminous coal systems.
    Once a sorbent injection system is installed, the sorbent, 
typically powdered activated carbon is delivered into the flue gas 
where it mixes with the gas and flows downstream. This provides an 
opportunity for the mercury in the gas to contact the powdered 
activated carbon and he removed. This is called ``in flight'' capture. 
The sorbent is then collected in the particulate control device where 
there is a second opportunity for sorbent to contact the mercury in the 
gas. Many sorbent injection systems have already been installed, 
although deployment of the systems will typically conform with the 
regulatory schedule. It is noteworthy that the same sorbent injection 
system can be used to achieve different levels of mercury control, with 
the level of control modified by the type and amount of the sorbent 
injected into the flue gas. It is also noteworthy that sorbents other 
than activated carbon continue to be tested for application to full-
scale deployment.
    As predicted based on technology demonstrations, significant 
amounts of mercury are being removed through the use of existing 
control technologies. Installed technologies including fabric filters, 
electrostatic precipitators, flue gas desulfurization, selective 
catalytic reduction, and others currently achieve high levels of 
mercury reductions. Although these processes were not originally 
intended, designed, nor optimized for mercury capture, the collateral 
mercury control is often sufficient to meet current requirements. 
Because mercury is captured as a co-benefit from these control 
technologies, the reductions are cost effective. Many other powerplants 
are anticipated to install SCR and FGD in response to the Clean Air 
Interstate Rule over the next several years, and are likely to be able 
to meet requirements through these integrated co-benefit approaches, 
with the potential to add additional mercury-specific control 
technologies as needed. Integrated systems can also be optimized to 
achieve greater amounts of mercury. For example, catalyst manufacturers 
can reformulate catalysts to increase the oxidation of mercury, making 
it more soluble for wet removal, or change catalyst formulations to 
lower the conversion of sulfur dioxide to sulfur trioxide.
    Given that a number of powerplants sell flyash that is captured in 
a particulate control device such as an electrostatic precipitator 
(analogous to a large scale home electric air cleaner), the presence of 
activated carbon in flyash became a challenge. Notably, the Electric 
Power Research Institute (EPRI) developed two control systems to meet 
these challenges including: TOXECONTM and TOXECON 
IITM. TOXECON allows flyash to be collected by the 
electrostatic precipitator, then injects the sorbent downstream where 
it is collected in a fabric filter. This preserves the flyash for sale, 
and controls mercury emissions. A full scale demonstration at the 
Presque Isle powerplant in Marquette, Michigan, demonstrated a 90 
percent mercury control at relatively low activated carbon injection 
rates (2.5 pounds per million cubic feet). In a second system, TOXECON 
IITM injects the sorbent between the last two fields in an 
electrostatic precipitator, allowing at least 90 percent of the flyash 
to be sold and only 10 percent of the flyash to be commingled with 
activated carbon The activated carbon can be either regenerated, 
recycled or disposed of with the flyash. Both systems continue to be 
tested to optimize their performance, and both systems preserve most of 
the flyash for sale for cement manufacturing.
    Recognizing the market demand for activated carbon driven by 
regulations, the air pollution control industry continues to make plans 
and investments into new and expanded production facilities. Activated 
carbon is manufactured using lignite coal as the raw material, and 
manufacturing is typically performed close to this source of coal. For 
example, the largest powdered activated carbon plant in North America 
is now in the pre-construction permitting stage to build on multiple 
sites up to four production lines. The goal of this $280 million 
project is to manufacture enough product to satisfy 50 percent of the 
U.S. market in 2015. Facilities would be constructed in close proximity 
to mine sites in Louisiana, and two in North Dakota. The total 
activated carbon market in the U.S. is anticipated to be less than 600 
million pounds per year in 2010 and approximately 1 billion pounds per 
year in 2015.
    The air pollution control industry continues to work responsibly 
with powerplant operators to ensure that mercury control systems are 
integrated into the facility's design and specific coal requirements, 
and that any operational issues can be addressed. Significant advances 
continue to be made in mercury control technology performance and 
commercial deployment is ongoing.
    Thank you for the privilege to testify before the Subcommittee on 
these critically important matters.

    Senator Carper. We thank you very much for your testimony 
and for the good work you all are doing.
    Dr. Levin, welcome and thank you.

 STATEMENT OF LEONARD LEVIN, TECHNICAL EXECUTIVE, AIR QUALITY 
 HEALTH AND RISK ASSESSMENT, ELECTRIC POWER RESEARCH INSTITUTE

    Mr. Levin. Thank you, Senator.
    I am Dr. Leonard Levin, technical executive at the Electric 
Power Research Institute, EPRI. EPRI is an independent 
nonprofit research organization based in Palo Alto, CA. Our 
research programs have investigated all aspects of 
environmental mercury fate, effects, and controls for more than 
20 years, at up to $20 million per year on these efforts.
    In the last several years, EPRI research has focused on 
quantifying the environmental and health benefits that would 
follow regulatory cuts in U.S. utility mercury. Much of this 
work has examined what might follow from some States adopting 
control levels of 90 percent, compared to the national 70 
percent cut due to EPA regulations.
    EPRI has also been extensively involved in testing and 
demonstration of mercury controls, working with the U.S. 
Department of Energy, EPA and many others.
    The potential health effects of mercury are almost 
exclusively due to consumption of fish containing excess levels 
of the substance. Fetuses are the ones most sensitive to this 
exposure due to their developing nervous systems. Thus, fish 
consumption by women of childbearing age is of greatest 
concern. From national survey data, we know that about 92 
percent of the fish consumed in the United States are from 
global ocean areas. At least three-quarters of that marine 
portion is from the Pacific, essentially upwind from the United 
States. For that reason, changes in U.S. mercury emissions are 
most likely to impact only the 8 percent of the fish consumed 
that may come from domestic freshwater resources.
    There is, in essence, a built-in floor bounding how low 
mercury exposure can be driven by controlling U.S. sources 
alone. EPRI research found that the greatest drop in exposure 
under the EPA CAMR rule will be about 7 percent for some women. 
Interestingly, EPA reached a similar conclusion, that the 
greatest exposure drop they could find would be 14 percent. 
These are essentially identical numbers in risk terms.
    These results on how much benefit can be derived from 
utility mercury controls alone were indirectly confirmed by the 
work of Dr. Trasande and his colleagues at the Mount Sinai 
School of Medicine. In their studies of mercury's impacts on IQ 
levels, they found that U.S. utility mercury is responsible for 
0.4 percent of the overall IQ effect. Thus, an independent 
investigation reached the same conclusion that EPRI did.
    There is a limit to how much benefit should be expected 
from any controls on utility mercury. The data used by Dr. 
Trasande, from the CDC's National Health and Nutrition 
Examination Survey, have shown a consistent, statistically 
significant, and so far unexplained drop in women's mercury 
exposure in the United States. The number of women with mercury 
levels above the EPA health threshold dropped from more than 7 
percent in 2000 to below 2 percent in 2004. Yet reported fish 
consumption has increased over that time.
    Overall, EPRI and others have found that once utilities 
reach the EPA 70 percent national control level, further 
controls on mercury have a declining payback in public health 
improvement. Nevertheless, it is important to seek viable 
control measures for utility mercury. Those efforts are now 
bearing fruit, focusing on two issues: can controls able to 
achieve 90 percent mercury reductions across the board be 
developed; and are such controls commercially ready?
    Control performance: Based on collaborative work with many 
partners, EPRI concludes that mercury controls to date perform 
quite differently on different powerplants. Plants burning 
eastern bituminous coals and equipped with nitrogen and sulfur 
controls for CAIR compliance, capture up to 90 percent of the 
mercury in the coal. These are the plants generally emitting 
higher proportions of divalent mercury, the kind that is most 
soluble in water.
    Current research is aimed at improving this to a consistent 
90 percent-plus level. Plants burning western coal, such as 
Powder River Basin coals, can be controlled by injecting 
bromine-impregnated activated carbon. Tests have found that up 
to 94 percent mercury removal can be gained at some of these 
plants. Other plants, however, show continuing issues with both 
operating lifetime and control efficiency.
    Commercial readiness: Regulations necessitating 90 percent 
mercury removal will require vendor guarantees of that level on 
every plant. To date, there have been no such assurances made. 
Additionally, major questions remain about impacts of carbon 
injection on powerplant operations.
    To summarize, some configurations of fuels and controls 
appear capable of 90 percent mercury removals, but many are 
not. EPRI is working diligently to expand the range of 
powerplants that can maintain removals at these high levels.
    Further reducing mercury emissions from 70 percent to 90 
percent, as shown in the charts that I provided the committee, 
will not significantly reduce deposition, however, since most 
of that mercury emitted after CAMR is reached is elemental 
mercury, which plays little role in U.S. deposition. 
Furthermore, we face the possibility that post-regulatory 
measurements to detect declines in mercury in U.S. waters or 
fish may be masked by significant mercury deposition from 
distant non-U.S. sources.
    In summary, first, data show that mercury exposure in women 
of childbearing age has declined over the past decade, quite 
significantly, while fish consumption has increased. Second, 
controls of mercury more stringent than the EPA's 70 percent 
national control level appear to have diminishing returns, 
primarily due to non-U.S. mercury imports and the form of 
mercury remaining in utility emissions after the EPA CAMR 
rules. Third, EPRI cannot yet say with confidence that 90-
percent effective mercury control technologies are commercially 
available for all powerplants.
    Thank you.
    [The prepared statement of Mr. Levin follows:]

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    Senator Carper. Dr. Levin, thank you very much.
    Let me just start off by asking Ms. Keating if there is 
anything that you would like to comment on with respect to Dr. 
Levin's testimony. Is there anything at all?
    Ms. Keating. Yes, I would like to comment on a few things 
that Dr. Levin said.
    Senator Carper. I thought I saw you writing furiously over 
there.
    Ms. Keating. Yes, I was making a few notes.
    First of all, as regard to the NHANES results with blood 
mercury levels, declining over the past 3 years. I would like 
to think that is a good news story, that these levels are 
declining, but I would like to say a couple of things about the 
NHANES survey itself. I am not sure that my colleague who is a 
statistician, Dr. Eric Tassone, would agree that three points 
on a line is a trend, but let's assume that that is a good 
thing over the last 3 years of that survey.
    What the survey shows is that fish consumption levels and 
blood mercury levels differ significantly by race and by 
geographic area. The NHANES samples only 26 places across the 
country, for each survey. So you can get different results from 
each survey depending on where they are sampling.
    In addition, we see far greater exposure to women that are 
Native American and Asian. You can argue about the number of 2 
percent, 3 percent, 6 percent, but the numbers for the other 
populations that are grouped all together is more like 25 
percent above the EPA's reference dose. So that is one point 
about the NHANES.
    I would like to say, a couple of years ago I heard Bill 
Wehrum speak at a symposium here in D.C., and he said 2 
percent, 3 percent, this is still a large number of children. 
There has been an emphasis on quantifying the benefits due to 
lower IQ, but I would have to say that that is really just the 
tip of the iceberg in terms of mercury effects. The cognitive 
effects that are much harder to quantify and so are oftentimes 
left out of that benefits equation, may be the effects that 
have a much greater affect in life and relationships and so on 
than a slightly lower IQ.
    Senator Carper. Thank you. Thanks very much.
    Mr. Foerter, let me go back to something that you said not 
once, but I believe twice. As you know, technologies follow and 
respond to regulatory drivers. Let me just say to you, when you 
look at what FirstEnergy has done and the investments they have 
made. What is the name of the company that you all have 
invested in?
    Mr. Pipitone. Powerspan.
    Senator Carper. Powerspan, yes. I presume the technologies 
that Powerspan is developing are not responding directly to 
regulatory drivers. You must be doing this for some reason. 
Maybe it is to develop the technology that, when we do have the 
regulatory requirements in place, that you have the technology 
there ready to help deliver the results. But maybe the idea of 
all these new coal-fired powerplants that are coming on line in 
China, when they finally get serious about reducing emissions 
that you will be there with a technology that we can export and 
use.
    But your thoughts on the comment from Mr. Foerter, as you 
know, technologies follow and respond to regulatory drivers, 
particularly in the context of how your companies are behaving.
    Mr. Pipitone. Our company, we started with Powerspan back 
in the late 1990s because we recognized that coal was such an 
important part of our energy mix in the United States, and 
invested in the technologies in anticipation that multi-
pollutant requirements would be coming down the road. It wasn't 
specifically at that time looking at mercury, but it was 
primarily focused on SO2, acid gases, fine 
particulate, and nitrous oxides.
    So we did it in anticipating more stringent regulations and 
to get a competitive advantage in our business, because we are 
a completely deregulated entity, and FirstEnergy Solutions part 
of our generating company. So we compete in a market. We don't 
get a regulated rate of return on our investments. So that was 
the driver for our efforts starting in the late 1990s.
    Senator Carper. Okay. Do you believe when Mr. Foerter says 
technologies follow and respond to regulatory drivers? Do you 
subscribe to that?
    Mr. Pipitone. I believe there is a relationship, no 
question about that, and more investment would go towards where 
the potential regulations are. Of course, there are a lot of 
risks involved with developing new technologies. The capital 
investment and the markets are so important to the economy that 
it is a risky set of circumstances and issues that are being 
dealt with. But investment will go towards those regulations 
over time.
    Unfortunately, the result and the timing of the result, as 
we experienced with Powerspan, is very unpredictable. When we 
started with Powerspan in 1998, we thought by 2001 we would 
have a commercial product. In fact, really, to prove it to 
ourselves that we had a commercial product, it took us until 
last year. I think that is very typical for new technology. The 
risks are just so high in relation to the investment and the 
impacts on the economy that that is the nature of it.
    Senator Carper. Let me yield to Senator Voinovich. I will 
come back to you for some follow-up questions. Thanks.
    Senator Voinovich. Thank you all for coming.
    Mr. Pipitone, is Powerspan applicable to both newly built 
plants and old plants with other emission control equipment 
such as scrubbers? That is one thing. The other is, for the old 
plants with existing equipment for 90 percent mercury, what 
about the stranded costs and who would pay for these costs?
    Mr. Pipitone. Let me address the question about the 
applicability of the equipment. For a plant, whether it would 
be a relatively new installation or old equipment that has been 
in service a long time, for equipment that has already been 
fitted with the combination of SCRs and scrubbers, adding a 
Powerspan ECO unit would not be economical.
    Senator Voinovich. SCRs and scrubbers?
    Mr. Pipitone. Selective catalytic reduction.
    Senator Voinovich. Yes, that is right. They are the ones 
that deal with the nitrous oxides?
    Mr. Pipitone. Nitrous oxides. Yes, I am sorry. It takes the 
combination of those two technologies to achieve the co-
benefits that have been discussed here today. SCR alone does 
not do it, and a scrubber alone does not do it. So having both 
technologies installed, selective catalytic reduction, SCR, for 
NOx, and scrubber for SO2 results in the co-benefits 
that we have been speaking of.
    To add an ECO Powerspan technology to a unit----
    Senator Voinovich. The indirect benefits, where does that 
take you to in terms of reduction of mercury?
    Mr. Pipitone. On eastern coals, our experience has been 
that it has been in the 80 percent to 85 percent range.
    Senator Voinovich. Okay. When you add the ECO, what happens 
then?
    Mr. Pipitone. If we look at ECO independently as a stand-
alone technology, it has been 83 percent in our experience to 
date. We would not add an ECO unit to a unit that already has a 
scrubber and SCR because in fact we would be duplicating the 
SO2, NOx and NOx removal portion, and then the SCR 
and the scrubber would become unusable, which I think addresses 
the question on stranded cost. That would, in fact, be stranded 
investment and would double the cost of pollution control, if 
you tried to add an ECO unit to a unit that already had SCR and 
scrubbers.
    Senator Voinovich. Okay. Do most of your units have SCR and 
scrubbers?
    Mr. Pipitone. No, they do not. We currently have three 
units, 2,400 megawatts total, which is about one third of our 
fossil fleet, with SCR and scrubbers. We are adding another 
1,200 megawatts right now that we are building of additional 
SCR and scrubbers, which would bring us up to about, in round 
numbers, 50 percent of our coal-fired fleet.
    Senator Voinovich. Right. But the fact is that in those 
cases, you would not be reaching a 90 percent number.
    Mr. Pipitone. That is correct.
    Senator Voinovich. The question is, and this gets back to 
Dr. Levin, because I know we debated this on the Floor of the 
Senate and I defended the rule that came out of the EPA. In 
other words, others wanted to go to 90 percent over a shorter 
period of time. When you looked at it in terms of the costs 
that would be involved to go to 90 percent, and then looked at 
the benefit that would be derived from going to 90 percent, 
versus what you are getting, say, at 83 percent with your SCRs. 
I think if you put the Powerspan on this plant that AmpOhio is 
going to build, what do you think that will bring them to on 
mercury?
    Mr. Pipitone. Based on our testing, in the neighborhood of 
85 percent.
    Senator Voinovich. About 85 percent. So the point is, under 
any circumstance, you are not going to get to the 90 percent.
    The next issue is, going from 83 percent to 90 percent, or 
85 percent to 90 percent, what benefits are going to accrue in 
terms of the issue that Ms. Keating has been talking about? Dr. 
Levin or anybody? Dr. Levin, do you want to comment on that?
    Mr. Levin. The issue of going from 70 percent mercury 
controls by an additional 20 percent, up to 90 percent control, 
should really be addressed in terms of the health benefits, 
which is the ultimate goal of any regulation. That health 
benefit relates directly to how much less mercury will be 
deposited as a result of the control steps.
    In the case of stepping from 70 percent to 90 percent 
nationally, the national gain in deposition is only about 2 
percent less mercury being deposited nationally. Now that, of 
course, will vary point by point. There will be some locations 
where there will be a further drop in deposition of more than 
10 percent, but in general there will be very little additional 
national gain in terms of health benefits, related to mercury 
by lowered deposition translating into less mercury in fish and 
lower mercury exposure to women of childbearing age and their 
children.
    Senator Voinovich. The other issue that came up, and I have 
been told, for example, in the Great Lakes that 20 percent of 
the mercury comes from overseas. If you calculate what China is 
doing, particularly on the West Coast, I think not only should 
we be concerned about what we are doing here, but they are 
building these new facilities over there, and I would be 
interested to know, Dr. Levin, do you know anything about what 
they are doing with these new coal-fired plants that they are 
building? Are they dealing with NOx and SOx? Are they going to 
get co-benefit from that, or are they doing SCRs?
    Mr. Levin. Purely by coincidence, I met with a number of 
representatives of the Chinese coal and utility industries last 
week at a meeting hosted by the University of Utah. At this 
point, the Chinese are not engaging in any significant 
retrofitting of existing coal facilities with new controls for 
the standard pollutants, SO2, NOx, and particulate 
matter, and none at all specifically for mercury.
    Senator Voinovich. So they wouldn't be doing scrubbers or 
SCRs?
    Mr. Levin. There has been no introduction of SCRs at all. 
There is control of particulate matter on new coal facilities 
that are being built, many of them with the assistance of other 
countries. The retrofitting of their existing coal fleet, which 
is a far broader range of industrial facilities than just 
powerplants, is proceeding slowly. Powerplants in China use 
only about one-half or so of the coal production as opposed to 
the United States, where power production uses about 90 percent 
or more of the coal produced.
    So there are broadly scattered coal facilities of all sorts 
throughout China, and none of them are being retrofitted at 
this point, while all indications are that Chinese mercury 
emissions (from inventories that have been done over the last 
few years) are increasing steadily year after year by at least 
3 or 4 percent per year. In some years, mercury emissions from 
China have actually jumped by 8 percent to 10 percent over a 
single year.
    Senator Voinovich. Thank you.
    Senator Carper. Mr. Pipitone, you say in your testimony, 
and I am going to just read it, it says, ``test results have 
shown ECO's mercury removal rate to average about 83 percent. 
However, with additional design and engineering refinements, a 
90 percent recovery rate may be achievable. By comparison, 
FirstEnergy's Bruce Mansfield Plant in Pennsylvania was one of 
the first powerplants in the world to be built with scrubbers 
as original equipment. Our testing indicates that about 85 
percent of the mercury is removed by selective catalytic 
reductions and scrubber systems.''
    Then you go on to say how at the unit operating in Burger, 
where they use different kinds of coals and get pretty good 
results, as long as you have some eastern coal that is included 
in the mix.
    Senator Voinovich and I in our old jobs, we focused a whole 
lot on how do we preserve existing jobs and go to new jobs. We 
are always interested in providing a nurturing environment for 
job creation and job preservation. One of the ways that you do 
that is to have lower costs of energy. Another thing is access 
to good health care and affordable health care.
    There is a tradeoff here, or at least there has been to 
some extent in the past, where we have a fair amount of cheap 
energy, but a lot of bad stuff up in the air. We breathe in and 
it hurts our health and drives up our health care costs. I 
don't know if we always can have our cake and eat it too, but 
it sounds to me like in your testimony you are saying that it 
is possible to get 83 percent to 85 percent of the mercury 
without costing consumers an arm and a leg, and at the same 
time to develop a technology, when we think of all these coal 
plants coming online in China, to actually have a technology 
that we can export, that we can sell to them.
    Am I missing something here? Is that pretty much what you 
are saying?
    Mr. Pipitone. It is possible, as has been demonstrated, Mr. 
Chairman, that we get co-benefits from SCRs and scrubbers that 
are averaging in the neighborhood of 85 percent. Again, as you 
mention, or less, depending on the coal mix; 85 percent is the 
upper end on pure eastern coals. That is the best that it gets.
    Senator Carper. That is with current technology?
    Mr. Pipitone. That is with current technology. You quoted 
my testimony correctly that it may be possible through further 
refinements to have the ECO process get up to 90 percent. Time 
will tell whether that happens.
    The issue becomes, though, whether SCRs and scrubbers must 
be installed on every coal-fired powerplant versus the 
powerplants that currently exist that are large and base-
loaded. When I look at our fleet, which is very typical of 
fossil-fired fleets, we have a mixture of units that serve 
different roles that are necessary to match the customer 
demands.
    We have what are called mid-merit coal-fired plants that 
have relatively low usage over a given year, and they are used 
only when the customer demand is high. Of course, they turn 
down at night or come off at night. To install scrubbers and 
SCRs on those units, in our system we have a number of units 
that, based on the current economics and the current markets, 
would likely be taken out of service and shut down, rather than 
have that investment be put in them.
    So investment in SCRs and scrubbers is possible on the 
large baseload units that we tend to all focus on, but the 
other units, mid-merit units, are absolutely essential to 
serving customer needs, and they very possibly could be shut 
down. In our system, we have a number of those.
    Senator Carper. All right.
    Mr. Foerter, given what Mr. Pipitone has testified to, with 
their technology getting them to maybe 83 percent, maybe even 
85 percent, perhaps 90 percent reduction of mercury in time, 
are there other technologies that could be used in conjunction 
with ECO that you might be aware of that are coming about? It 
sounds like actually with current technologies, we are pretty 
close to at least 80 percent, 85 percent. We are just knocking 
on the door of 90 percent.
    We are looking at legislation that some of us have 
introduced that by 2015 to have in place systems throughout the 
country that reduce emissions from coal-fired plants by 90 
percent. But given what they have developed through Powerspan, 
their ECO technology, and given other technologies that are 
coming online, how realistic or unrealistic, and how cost 
effective can the 90 percent goal be?
    Mr. Foerter. For their technology, it is an integrated 
technology, where they have integrated everything basically in 
a box, so to speak. So they tend to be conventional 
technologies, but the integration is the innovation on it. 
Because they are relying on co-benefits for the mercury, there 
are ways to actually optimize the co-benefits. They can use 
oxidizing catalysts, which will help move the mercury into a 
form that can be picked up a little bit better from a web 
scrubber, less elemental goes into the air if it is caught by 
scrubber and taken out of the system.
    I don't know if they have used others, like sorbent 
injection technologies in there. I think it does have a wet 
electrostatic precipitator at the end, so there are some 
polishing devices in there. I don't pretend I know their 
technology fully, but I would expect that there are ways. He 
seemed to have some optimism about being able to optimize it 
with a little bit more work. So I will share his optimism.
    Senator Carper. All right. Good. My time has expired.
    Senator Voinovich.
    Senator Voinovich. I haven't given Ms. Keating a chance to 
talk. You have heard this testimony, and I heard your 
testimony. From a health benefit, if we can get 80 percent to 
85 percent, and I don't know, it will take you, what, a couple 
of years to know about the ECO and whether it is doing its 
thing or not. I know we are talking about, this is a big plant 
in Ohio, AmpOhio, I think it is going to be a 1,000 megawatt 
plant. They are going to use the Powerspan technology. You are 
basically saying right now that about 85 percent, but maybe it 
could be more.
    Mr. Pipitone. We won't know until 2012 or 2011.
    Senator Voinovich. Yes. So the question I have is this, is 
that if that is the status of where we are, in other words the 
level, what kind of additional health benefits are we going to 
get if we go from 85 percent to 90 percent, where 90 percent 
seems to be a little bit difficult to reach right now?
    Ms. Keating. Yes. Well, first I would like to say based on 
these gentlemen's testimony that I think it lends itself to 
going forward with a multi-pollutant approach, where you 
control SO2 and NOx and mercury and maybe something 
else at the same time, because as it stands now, you have the 
CAMR rule and the CAIR rule, which are related, but in fact 
nothing is required under the CAIR rule to reduce mercury. So 
you might in fact have a plant that decides to scrub one unit 
and not another and so on, or in the case of a plant in North 
Carolina, installing NOx controls in the form of an SCR, which 
would actually increase oxidized mercury emissions from that 
plant and potentially exacerbate a hotspot in that region.
    So I think this discussion lends itself to looking at the 
comprehensive Federal legislation.
    Now, with respect to your direct question about the health 
benefits, I think that one misperception that I have heard is 
that the elemental mercury that is left over that is more 
difficult to control, admittedly, disappears into the global 
pool and never affects the United States. I would differ on 
that. Not a lot is known about the atmospheric chemistry of 
that particular mercury becoming oxidized in regions of high 
ozone, when it hits the coastal marine environment, depositing 
there, affecting ocean fish and so on; as well as dry 
deposition. I would like to point out that a study in 
Underhill, VT, where there are no local coal-fired powerplant 
sources, they are measuring and back-calculating emissions from 
Midwest powerplants that are affecting that region.
    So presumably, these would be elemental mercury emissions 
that weren't deposited locally.
    Senator Voinovich. Well, the question I have, though, is 
from a percentage point of view, if you look at what we see the 
technology to be.
    Ms. Keating. Is that 5 percent?
    Senator Voinovich. The question is how much health benefit 
are you going to derive from that 5 percent? Yes.
    Ms. Keating. Yes. I think that is going to vary by 
location. I think that some of the regions in the country that 
are most highly affected, like the Northeast States, are 
affected by lower deposition than we have in the Southeast. 
Yet, their fish levels are very high, based on water chemistry 
parameters and land use patterns and such as that. So I think 
it is going to vary by location. On a national average, it 
probably would not be the extra 5 percent, but I believe in 
some areas it would be more than that.
    Senator Voinovich. Do you have the ability to measure it?
    Ms. Keating. No, because we don't have the monitoring 
network in place that Senator Collins was advocating for. 
Whether you think that 70 percent is the right number or 90 
percent is the right number, you can't answer that question 
without this infrastructure in place.
    Senator Voinovich. Well, it is a big deal because what we 
want to do is balance, as I said earlier. You can look at your 
energy needs and look at your economic needs and you look at 
your environmental concerns and public health. You have to kind 
of put those all together and figure out how do you best get 
the job done.
    Ms. Keating. Right.
    Senator Voinovich. Then one other issue, and that is, and I 
am sure you are just as concerned as I am about what is going 
on in some other places in the world today. We really have to 
get on this. At one time, we were the real culprit, but now 
what is happening is that we have other places that we have to 
be very concerned about.
    Ms. Keating. Right. I understand. I think it lends itself 
to even looking at other sources like products and closing the 
loop on that export of mercury for incineration and product use 
in other countries like India and so on. So there are lots of 
complicating issues with this pollutant, besides the one in 
front of us.
    Senator Voinovich. Thank you.
    Senator Carper. I would like 30 seconds if I could to kind 
of, not give the benediction, but sort of give the benediction.
    This has been an encouraging hearing for me, and I hope for 
my friend Senator Voinovich. We know that there is too much 
mercury going up in the air, not just here, but around the 
world. I am very much encouraged, Mr. Pipitone, by the work 
that you all have done at Powerspan and your integration of 
that technology into the real world.
    I am encouraged by what Mr. Foerter tells us that other 
technology companies are beginning to develop. It is his belief 
that if we actually say through regulations that we have to do 
better, that the technology will follow.
    I am intrigued at how FirstEnergy seems to be ahead of that 
curve, and actually helping to develop the technology in 
anticipation of the requirement to meet it. They are going to 
be there. They are going to be there not only with lower 
emissions at FirstEnergy, but they are going to be there with 
technology that will help reduce emissions at other plants 
across this country and potentially around the world.
    As we see one new coal-fired powerplant coming online 
almost weekly in China, spewing all kinds of bad stuff up into 
the air, I think we have the opportunity to actually, instead 
of them always exporting products to us, we can export a 
product to them, and they will export a lot less mercury in our 
direction, which would be a great thing for all of us.
    Any closing words?
    Senator Voinovich. That's it.
    Senator Carper. All right. Our thanks to each of you. I 
would ask that if you get some questions from us in the week or 
two ahead that you just respond promptly to us. We are grateful 
for your testimony and for your being here with us today and 
the good work that you are doing. Thank you so much.
    This hearing is adjourned.
    [Whereupon, at 12:40 p.m. the subcommittee was adjourned.]
    [Additional statements submitted for the record follow.]

   Statement of Hon. Bernie Sanders, U.S. Senator from the State of 
                                Vermont

    Green building is one of those things that makes sense on so many 
levels that it is truly unbelievable that we haven't already passed 
strong federal legislation on the topic. From the tracking done by 
those working with the Leadership in Energy and Environmental Design 
program, commonly referred to as LEED, we know that certain green 
building methods not only reduce energy use--thereby reducing energy 
costs associated with the upkeep of a building--but also offer 
significant public health benefits. For example, no one can argue with 
the fact that children learn better when they are in an environment 
that provides natural lightening and higher quality indoor air, both of 
which are basic to green building methods. And, as we work to get 
serious about responding to the greatest environmental threat we have 
ever faced, global warming, we have to look to our buildings to be as 
energy efficient as possible. In fact, I have been a strong proponent 
of weatherizing houses for my entire political career and the concrete 
benefits of true green building efforts get my interest in a similar 
way. This is because we have an opportunity to be smarter about the way 
we do something--and in the process help people save money in the long 
term and promote a better environment. More specifically, we can help 
people use less energy, reduce carbon dioxide emissions, and reduce 
wasteful water use.
    So, let's get down to business on this issue. I am a proud 
cosponsor of Senator Lautenberg's Green Buildings bill, S. 506. I hope 
that this Committee will soon mark up Green Building legislation and I 
am sure that today's hearing will be the basis for such action.

                               __________
 Statement of Lisa P. Jackson, Commissioner, New Jersey Department of 
                        Environmental Protection

                              INTRODUCTION

    Good morning Chairman Carper, Ranking Minority Member Voinovich and 
members of the subcommittee. I thank you for the opportunity to come 
before you today and provide New Jersey's perspective on the threat 
that the hazardous air pollutant mercury poses to our nation, as well 
as our state's efforts to address this threat.
    While New Jersey is proud of its leadership role in regulating 
sources of mercury, in many ways we were forced into that position 
through a lack of federal leadership. I congratulate this committee on 
highlighting the continuing impacts of mercury on both public health 
and the environment and hope that New Jersey's perspective is 
beneficial to your efforts.

                            MERCURY IMPACTS

    Mercury is a highly toxic heavy metal and a potent neurotoxin that 
attacks the nervous system. It is particularly insidious because its 
human health impacts focus on the most vulnerable members of our 
society: infants and fetuses developing in their mothers' wombs. 
Mercury can cause permanent brain damage to a developing system. It can 
hurt the ability of children to pay attention, remember, talk, draw, 
run, see and even play. In New Jersey alone, we estimate that more than 
5,000 newborns every year are exposed to dangerous levels of mercury in 
utero, and our testing has revealed that at least 1 in 10 pregnant 
women in the State has concentrations of mercury in their hair samples 
that exceed safe levels. Nationwide, the USEPA has estimated that 
between 200,000 and 400,000 children are born each year in the United 
States with pre-natal exposure to mercury sufficient to put them at 
risk for neurological impairment.
    New Jersey and the rest of the mid-Atlantic and northeast regions 
of the country have been particularly impacted by mercury. powerplants 
are the single largest source of the country's mercury emissions, 
emitting almost 50 tons of the neurotoxin per year. The significant 
number of powerplants, combined with prevailing wind patterns, result 
in large amounts of mercury being deposited into our soils and 
watersheds. Recent decades have seen a four- to six-fold increase in 
the mercury deposited in the northeastern United States.
    Human exposure to the most toxic form of mercury comes primarily 
from eating contaminated fish and shellfish. In aquatic systems, 
mercury is quickly taken up into larger animals through the food chain, 
and those animals retain the mercury in their bodies. Levels of 
methylmercury in fish are typically 100,000 times those in the water in 
which they swim. High concentrations of mercury in the fish in New 
Jersey's waterways has led to 100 percent of our lakes, streams and 
reservoirs being placed under either statewide or regional mercury 
advisories. This totals more than 4,100 waterbodies in New Jersey alone 
and is indicative of the grave threat we all face.
    Much of the mercury deposited from the air in New Jersey is emitted 
from sources in upwind states. Even in the remote waterways in the 
Pinelands, a relatively undeveloped area with no localized industry, we 
have detected significantly high levels of mercury in fish. This 
underscores the need for comprehensive protections on the national 
level that address mercury (and other hazardous air pollutants) that 
can drift beyond localized areas to affect downwind states.
    By no means is New Jersey alone in dealing with the impacts of 
mercury. Nationwide, 45 states have mercury fish consumption 
advisories. These advisories cover more than 13 million acres of lakes, 
and 750,000 miles of rivers. Research has documented the continued 
existence of ``hotspots'' of mercury pollution--areas where 
concentrations of mercury in animals consistently exceeds safe levels. 
Confirmed or suspected hotspots have been identified throughout the 
Northeast, in New Jersey, Maine, New Hampshire, Vermont, New York, and 
Connecticut. It is apparent that these are really ``hot regions,'' not 
small areas that might be implied with the term ``hot spots.''


                       FEDERAL MERCURY REGULATION

    Through the 1990 Amendments to the Clean Air Act, Congress sought 
to address the unique problem of hazardous air pollutants, requiring 
that EPA set the ``most stringent standards achievable'' for sources of 
a specific list of 188 hazardous pollutants, including mercury. The 
standards must be based on ``the maximum reduction in emissions which 
can be achieved by application of [the] best available control 
technology'' and came to be known as MACT standards, which is short for 
Maximum Achievable Control Technology. Under the revised hazardous air 
pollutant section of the Act, Congress required EPA to set such MACT 
standards for all source categories of the pollutants by the year 2000.
    Unfortunately, in 2005 EPA chose to disregard this Congressional 
mandate and instead exempted powerplants from the stringent MACT 
standards of the Act. EPA's plan, entitled the ``Clean Air Mercury 
Rule'' or ``CAMR'' has several fundamental problems. First, in 
violation of the Clean Air Act, CAMR removes powerplants from the 
typical hazardous air pollutant regulations without meeting the clear 
statutory requirements for such an exemption. Second, CAMR attempts to 
set up a cap-and-trade system for mercury. Trading a potent neurotoxin 
has never been done before and is inherently dangerous, as it will 
allow certain facilities to purchase emission credits and escape any 
reduction in their mercury emissions. People living nearby such 
polluters will be exposed to continuing high levels of mercury for 
decades. Third, CAMR will take decades to implement. Because emission 
credits can be banked, the Congressional Research Service reported that 
full implementation may not occur until 2025 or later. This provides 
little protection to the thousands of newborns suffering from mercury 
exposure every year. Finally, even at full implementation in 2025, CAMR 
requires levels of emission reductions that do not even reflect today's 
MACT.

                 STATE LEADERSHIP ON MERCURY REGULATION

    Lack of constructive EPA action to address mercury has forced many 
states to take independent action. In New Jersey, a Mercury Task Force 
was created in 1992, and a new task force was convened in 1998, to 
review and study sources of mercury pollution, its impact on health and 
ecosystem and to develop a mercury pollution reduction plan. The Task 
Forces were composed of representatives from various sectors, including 
academia, business and industry, utilities, environmental groups, and 
federal and local governments. They reviewed mercury emissions data 
from over 30 source categories in New Jersey.
    In the end, the Task Forces recommended a strategic goal of an 85 
percent decrease of in-state mercury emissions from 1990 to 2011. This 
goal was based on the acknowledged threat posed by mercury and the Task 
Force's determination that significant reductions of mercury from 
various sources are achievable in New Jersey. It should be highlighted 
that the Task Force evaluated the feasibility of addressing the whole 
range of sources of mercury, from powerplants and iron and steel 
smelters, to mercury switches in automobiles, to amalgam for teeth 
fillings.
    As a result of the Mercury Task Forces' recommendations, in 
December 2004, New Jersey established stringent new restrictions on 
mercury emissions from coal-fired powerplants, iron and steel smelters, 
and medical waste incinerators; and tightened existing requirements for 
municipal solid waste incinerators. Those rules will reduce in-State 
mercury emissions by over 1,500 pounds annually, reflecting: (1) over 
75 percent reduction from the State's six iron and steel smelters by 
2009; and (2) over 95 percent reduction below 1990 levels from the 
State's five municipal solid waste incinerators by 2011. Details of the 
iron and steel smelter and municipal solid waste incinerator 
regulations are attached as an appendix to this testimony.

                           COAL-FIRED BOILERS

    New Jersey's powerplant mercury regulations apply to the ten coal-
fired boilers in the State. These electric generating units in New 
Jersey emit approximately 700 pounds of mercury per year in the State. 
The source of the emissions is from the mercury contained in the coal. 
This industry is the second largest source category of mercury 
emissions in New Jersey. The new rule gives the New Jersey powerplants 
until December 2007 to begin keeping 90 percent of the mercury in coal 
from being emitted into the air or to meet a strict regulatory limit (3 
milligrams per megawatt hour) that achieves comparable reductions.
    Every plant will have to reduce emissions without emissions 
trading. A company that commits to reducing substantially air pollution 
that causes smog, soot and acid rain, as well as mercury, will earn an 
additional 5 years to comply if mercury emission reductions are phased 
in with concurrent reductions of particulates, sulfur dioxide and 
nitrogen oxides. The Department expects the new rule to result in a 
reduction in mercury emissions from coal-fired boilers of greater than 
400 pounds per year by the end of 2013.
    I would like to highlight the particulate component of New Jersey's 
multipollutant strategy. With the addition of carbon dioxide, New 
Jersey will have a five pollutant strategy for coal-fired electric 
generating units (EGUs). Carbon dioxide and particulate distinguish New 
Jersy's multipollutant strategy from USEPA's three pollutant strategy. 
Coal EGUs are one of the largest source categories of heavy metals and 
fine particulates. Many coal EGUs have outdated and poorly performing 
particulate control. This control needs to be upgraded for:
    a. Mercury Control
    b. Other toxic heavy metal control
    c. Fine particulate control
    As you debate whether the federal government should adopt 
regulations that mirror New Jersey's 90 percent mercury emission 
requirement, you of course must examine whether this policy is 
achievable, both economically and technologically. I am here to state 
to you unequivocally that, based on New Jersey's experience, this 
reduction target is indeed achievable. Our powerplants, who it should 
be noted did not challenge this rule, have not given any indications 
that they will not be able to meet the requirements.
    New Jersey's mercury rules reflect the ability of currently 
available control technologies to achieve significant reductions in 
mercury emissions from the major sources of the pollutant--including 
powerplants. USEPA's Utility MACT Working Group, the Mercury Study 
Report to Congress and the pilot tests conducted in New Jersey at coal-
fired boilers for control of mercury emissions all reflect that mercury 
reductions exceeding 90 percent can be achieved by powerplants across 
the country.
    Furthermore, while New Jersey's rules are some of the most 
stringent, comparable standards are being adopted by numerous other 
states. Massachusetts is now requiring 85 percent reduction by 2008 and 
95 percent by 2012. Connecticut is requiring 90 percent reduction by 
July 2008 while Maryland is calling for reductions of 80 percent by 
2010 and 90 percent by 2013. All these states clearly feel that large 
reductions in mercury from powerplants are not only essential to 
protect public health, but are fully achievable now. Similarly, STAPPA-
ALAPCO (now ``NACAA''), the association of state and regional air 
regulators from around the country, came out with a model mercury rule 
in November 2005, that calls for a 90-95 percent reduction in mercury 
from powerplants by 2012. The conclusion seems clear, these reductions 
not only should be implemented, but they in fact can be done. Most 
telling, EPA's own database, used in the CAMR rulemaking, acknowledged 
that the cleanest, currently operating powerplants, burning every type 
of coal, are performing better than CAMR will require them to perform 
in 2025.
    It is now time for the EPA to come to the same conclusion.

          MULTI-STATE CHALLENGE TO FEDERAL MERCURY REGULATION

    New Jersey did not originally plan to propose New Jersey-only rules 
for our major sources of mercury emissions. It was only after it became 
apparent that EPA would be proposing either weak or nonexistent 
standards for our major emitters that New Jersey and other states were 
put in a position of having to do their own rules. Numerous other 
states have decided to opt-out of EPA's CAMR approach, implementing 
instead an array of regulations more protective of public health than 
the EPA's.
    States, however, should not need to expend valuable resources on a 
problem that is best addressed consistently nationwide, and New Jersey 
is proud to lead a coalition that is challenging EPA's failures in 
court. Seventeen states, including subcommittee members' states such as 
Delaware, New York, Connecticut, and Vermont, have filed suit in the 
U.S. Circuit Court of Appeals for the District of Columbia, asserting 
that CAMR violates the requirements of the Clean Air Act. It is 
disappointing that this legal action was required as the flaws with 
CAMR were repeatedly pointed out by countless commenters during the 
rulemaking process.
    It is even more disappointing that the mercury litigation is just 
one in a series of actions by the states to compel EPA to meet its 
basic responsibilities under the Clean Air Act.

                               CONCLUSION

    New Jersey's experience with mercury regulation can serve as a 
model for effective national regulation. Today, a total of 
approximately 1,800 pounds per year of mercury is being emitted in New 
Jersey from the 13 municipal solid waste incinerators, three medical 
waste incinerators, ten coal-burning units, and six iron and steel 
scrap melting plants. This is down from about 6,200 pounds per year 
from these sources in 1990--a seventy percent reduction already and 
many of the milestone dates are still to come. We expect emissions to 
be further reduced to about 300 pounds by 2013, after full 
implementation of New Jersey's rules. If New Jersey's regulations on 
powerplants were applied nationally, mercury emissions from coal-fired 
powerplants would decline from approximately 48 tons to about five tons 
annually.
    The leadership of individual facilities and states around the 
country has shown that the technology is available to meet the legally 
required standard today and that powerplants can comply with a MACT 
standard for mercury that protects public health significantly more 
than EPA's CAMR. For the sake of the health of our children and 
communities, a more protective standard is warranted that limits 
exposure to this hazardous air pollutant as soon as possible. 
Implementing the real maximum achievable protections is simply the only 
moral and ethical choice available if we are to meet our responsibility 
as public officials entrusted to protect the nation's environment and 
health for this generation and the generations that follow.

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   Responses by Lisa P. Jackson to Additional Questions from Senator 
                                Sanders

    Question 1. Your state has gone well beyond EPA's ``Clean Air 
Mercury Rule'' by requiring faster and deeper mercury reductions from 
powerplants. Please tell us what you concluded about the current and 
future state of mercury pollution control technologies during the 
period in which your rule will be carried out that led you to believe 
utility owners could achieve the mercury standards in your law. What, 
if any, communications have you received from EPA regarding your state 
mercury standards?
    Response. The Department provided detailed comments to USEPA 
several times in the past concerning proposed USEPA mercury rules for 
Electric Utility Steam Generating Units (on June 24, 2004), Large 
Municipal Waste Combustors (on February 7, 2006), and Iron and Steel 
Foundries (on May 17, 2007). Copies of these comments are attached 
hereto as Exhibits A, B, & C.
    New Jersey's state plan for mercury emissions reductions from 
powerplants was based on the efforts of two mercury task forces and 
years of successful regulation of several of the State's other major 
sources of mercury. New Jersey created its first Mercury Task Force in 
April 1992, to review and study sources of mercury pollution, its 
impact on health and the ecosystem and to develop a mercury pollution 
reduction plan for municipal solid waste incinerators (MSWIs) in New 
Jersey. As a result of the first Task Force recommendations, standards 
for municipal solid waste incinerators were promulgated in 1994, at 
NJAC 7:27-27: Control and Prohibition of Mercury Emissions. All of New 
Jersey's MSWIs met the mercury standard within 1 year. Mercury 
emissions from MSWIs have been reduced by about 97 percent over the 
last 12 years. The MSWIs use Activated Carbon Injection (ACI) to 
achieve these results.
    In New Jersey, there is over a decade of successful use of ACI for 
MSW combustion. Some incinerators with baghouse control and ACI have 
achieved 99 percent mercury control. Transfer of such technology to 
other source categories is clearly feasible from an engineering and 
cost perspective. ACI use on coal combustion has shown similar emission 
reduction efficiencies as for MSW incinerators, with the same 
relationship to the two particulate control devices in widest use by 
both coal-fired EGUs and MSW incinerators; that is baghouses and 
electrostatic precipitators. For MSW incinerators with baghouses, 
mercury emission levels in the vicinity of New Jersey's coal-fired 
emission limits have been attained, even though MSW incinerator 
uncontrolled mercury concentrations are much higher. This indicated it 
was logical that a coal-fired EGU could also meet these emission 
limits, which has been proven with testing of ACI on coal-fired EGU's 
in New Jersey and elsewhere. In essence, if a MSW incinerator can meet 
an emission level with 99 percent control, a coal-fired EGU with \1/10\ 
the uncontrolled mercury can meet the same emission level with 90 
percent control efficiency.
    Also, USDOE cost analyses indicate that retrofitting the coal-fired 
boilers with activated carbon injection and baghouses (or polishing 
baghouses) can achieve 90 percent mercury emission reduction. ACI has a 
low capital cost. It also has low operating costs if baghouse 
technology is used. Retrofitting baghouses is a substantial capital 
cost, but serves to also reduce fine particulate emissions and other 
heavy metals, in addition to mercury. (Testing of pilot ACI system on 
coal-fired EGUs with baghouses in New Jersey has shown compliance with 
the New Jersey mercury limit).
    Data also show that ACI is effective with electrostatic 
precipitators (ESPs), although more carbon is needed, and the operating 
cost is higher. Two of New Jersey's MSWI facilities have ESPs and use 
ACI to effectively control mercury. (Also, testing ACI this year at a 
coal-fired facility with ESPs indicates compliance with the New Jersey 
mercury limits).
    As with any air pollution control system, plant-specific operating 
parameters may affect the operation of a carbon injection control 
system. Those effects can only be conclusively determined by 
installation of a system on a specific unit and determining the best 
carbon distribution and feed rates for that unit and whether chemically 
treated carbon is useful. Extended demonstration periods at other 
plants, while comforting, are not needed or conclusive with respect to 
the exact operation of a system on another plant. The capital cost of 
carbon injection technology is sufficiently low that the best way of 
determining its effectiveness on a unit is to install a system and test 
various injection rates with different types of carbon. The 
Department's experience with MSW incinerators shows carbon injection 
technology can be installed in a matter of months at relatively low 
cost compared to the cost of the emission unit. There currently is 
sufficient demonstration of carbon systems on many types of plants, 
including coal-burning plants, to design and install a carbon injection 
system, which will be highly effective at reducing mercury emissions, 
with reasonable adjustments of the system to maximize effectiveness.
    In 1998, the Department established a second Mercury Pollution Task 
Force to develop and recommend a comprehensive multimedia mercury 
pollution reduction plan for the State of New Jersey, including 
recommendations on mercury emission controls and standards for major 
sources. Based on the Task Force recommendations, on December 6, 2004, 
the Department revised its mercury emission regulations for municipal 
solid waste incinerators and adopted new mercury emissions limits for 
coal combustion, iron and steel scrap melting, and medical waste 
incinerators.
    New Jersey's rules require all 10 boilers at seven coal-fired 
facilities in the State to install mercury control by December 2007, or 
December 2012 if there is a multi-pollutant control commitment. Our 
December 2004 rule specifies that the mercury emissions from any coal-
fired boiler shall not exceed 3 milligrams per megawatt hour (mg/MW-hr) 
or in the alternative, a coal-fired boiler must achieve 90 percent 
reduction in mercury emissions across the air pollution control 
apparatus. The control deadline can be extended to December 2012, for a 
company that commits to major reductions in emissions of NOx, 
SO2, and particulate, along with mercury and controls at 
least 50 percent of its coal-fired capacity by December 15, 2007. These 
emission reductions are based on New Source Review (NSR) consent 
agreements, which are more stringent than CAIR. In short, the New 
Jersey rules achieve greater mercury emission reductions in a shorter 
timeframe than USEPA's Clean Air Mercury Rules and achieve those 
results without emission trading, ensuring mercury emission reduction 
at every plant in New Jersey and no hotspots.
    The New Jersey experience shows that mercury emission standards are 
achievable for coal-fired powerplants. In fact, none of New Jersey's 
powerplants challenged the state standards, a telling indication of the 
standard's achievability PG&E National Energy Group's coal-fired units 
are already below or close to the New Jersey mercury standard of 3 
milligrams per megawatt hour (mg/MW-hr) without activated carbon 
injection. Some plants in the USA, including these in New Jersey, have 
already met the New Jersey standards with no mercury-specific control 
technology, as documented in USEPA's information collection request 
(ICR), which resulted in the testing of about 80 coal-fired boilers in 
the USA in 1999. Scrubbers and baghouses in current use at these New 
Jersey coal-fired powerplants, in conjunction with low NOx burners and 
selective catalytic reduction to control emissions of nitrogen oxides, 
have achieved mercury reductions of more than 90 percent (98 percent 
tested at one plant).
    Additionally, ``preliminary'' results at New Jersey coal-fired 
powerplants, which are installing ACI to meet our 12/15/2007 deadline, 
indicate promising results for carbon injection as shown in Attachment 
1. Official compliance tests are not due until March 2008, and New 
Jersey allows until 12/15/2008 to optimize the mercury control system. 
The sum of New Jersey's experience is that, using either ACI or more 
traditional controls such as low NOx burners, SCR, scrubbers and 
baghouses, powerplants can achieve reductions of their mercury 
emissions far exceeding the requirements in EPA's CAMR.

    Question 2. EPA declared in its final mercury rules for powerplants 
that it was not only ``unnecessary'' but also ``inappropriate'' to 
regulate mercury emissions from powerplants under the Clean Air Act's 
stringent air toxic provisions in section 112. Hasn't EPA long 
regulated mercury from other types of industries, however, under this 
same stringent Clean Air Act authority? And if so, what has the 
experience been there? Does it make sense to you that it is appropriate 
to regulate mercury emissions from some types of industries using the 
law's most protective tools, but ``inappropriate'' to do so when it 
comes to powerplants?
    Response. The 1970 Amendments to the Clean Air Act (CAA or Act) 
added section 112 to the Act and specified that the EPA Administrator 
must list each ``hazardous air pollutant for which he intends to 
establish an emission standard.''\1\ When EPA failed to meet this 
mandate--listing only seven pollutants in 20 years--the 1990 Amendments 
to the Act restructured section 112 and required EPA to set emission 
standards for all major sources of a list of 188 hazardous air 
pollutants (HAPs)--including mercury. Emission standards promulgated 
under section 112 require the maximum degree of reduction in emissions 
of HAPs or the maximum achievable control technology (MACT).
---------------------------------------------------------------------------
    \1\ Pub. L. 91-604, Sec. 4(a), 84 Stat. 1685.
---------------------------------------------------------------------------
    For HAPs, other than mercury, section 112 has generally been an 
effective regulatory tool for reducing HAPs in our environment. MACT 
standards located at http://www.epa.gov/ttn/atw/mactfnlalph.html have 
been promulgated for sources other than EGUs under section 112. 
However, despite the general success of section 112, EPA has failed to 
regulate mercury effectively under this section. EPA has yet to set 
effective MACT limits for coal-fired electric generating units; coal-
fired industrial, commercial and institutional (ICI) boilers; and iron 
and steel swap melters, which are amongst the major sources of mercury 
emissions in the USA. The only MACT limit that refers to mercury is for 
ICI boilers, where mercury is combined in a limit for other HAPs that 
is set too high to result in mercury emission reductions being 
required. For iron and steel melters, EPA did not even set an emissions 
limit for mercury, but relied entirely on a work practice standard 
involving source separation. Even where Congress specifically provided 
for mercury regulation of municipal solid waste incinerators (MSWI) in 
section 129 of the Clean Air Act, EPA did not adopt mercury rules for 
such incinerators until 5 years after New Jersey adopted its first MSWI 
mercury rules in 1994, and these standards are less stringent than New 
Jersey's standards.
    When Congress amended section 112 in 1990, it included a specific 
provision, section 112(n), for the regulation of HAPs from electric 
utility steam generating units (EGUs). Under this section, Congress 
required EPA to study the hazards to public health reasonably 
anticipated to occur as a result of HAP emissions from EGUs. This 
section also required EPA to regulate EGUs under section 112, if EPA 
concluded that such regulation was ``appropriate and necessary'' after 
considering the results of the study. In February 1998, EPA completed 
its study, and in December 2000, concluded that it is ``appropriate and 
necessary'' to regulate EGUs under section 112. Despite this finding, 
EPA's recent Clean Air Mercury Rule (CAMR) fails to establish an 
effective MACT standard for HAPs such as mercury under section 112 for 
EGUs, and instead regulates mercury under a cap-and-trade program 
promulgated under section 111 of the Clean Air Act.\2\
---------------------------------------------------------------------------
    \2\ New Jersey and coalition of 16 states are challenging EPA's 
mercury rules in the Circuit Court of Appeals for the District of 
Columbia. The brief in that matter highlights the legal shortcomings of 
EPA's rules, and is attached as Exhibit D.
---------------------------------------------------------------------------
    For source categories other than EGUs, Congress did not require EPA 
to make the ``appropriate and necessary'' finding prior to setting a 
MACT standard, but rather required EPA to list source categories 
pursuant to section 112(c) that emit HAPs listed in section 112(b), and 
to set emission standards that reflect the maximum degree of reduction 
of HAP emissions, as required by section 112(d). As stated above, EPA 
has failed to set effective MACT standards for mercury reductions from 
coal-fired industrial, commercial and institutional (ICI) boilers, and 
iron and scrap melters.
    Since mercury represents a potent neurotoxin, which has been proven 
to cause serious neurological and developmental impacts, including loss 
of IQ in infants and children, it should be regulated in the most 
rigorous manner as provided for under section 112. Since EPA made the 
finding that it was ``appropriate and necessary'' to regulate mercury 
emitted from EGUs and cannot justify delisting EGUs as a source 
category under section 112(c), it must regulate this pollutant in 
accordance with section 112. Once this finding was made, there is 
simply no justification to regulate mercury from EGUs differently from 
any other industry that emits mercury or any other HAP. Congress 
directed EPA to regulate mercury in a manner that represents MACT, and 
EPA should act in a manner that fulfills that statutory mandate for all 
source categories of mercury.

    Question 3. In addition to the regulation of powerplants, I 
understand that your state and other states have been recycling 
products containing mercury, like auto switches and thermometers. Do 
you know what happens to the mercury once it has been sent to the 
recycler? What do you think about closing the loop by banning the 
export of mercury so that mercury that is recycled is not then used in 
ways that pollute the environment?
    Response. Pursuant to New Jersey's Mercury Switch Removal Act of 
2005, which became effective March 23, 2005, manufacturers of motor 
vehicles sold in New Jersey have developed and are now implementing a 
plan to remove mercury-containing switches from end-of-life vehicles. 
These switches are sent to a mercury recycling facility, with mercury 
retorting equipment, where they are heated until the mercury vaporizes, 
and then the vapor is condensed as pure mercury. Other mercury-
containing items, including thermostats, are recycled in the same 
manner. There are several mercury retorting facilities in the U.S. In 
addition to the mercury recycled from discarded switches, etc., mercury 
is supplied by gold mines in the western U.S. where it is produced as a 
byproduct. It also enters the marketplace in significant quantities in 
the U.S. through the decommissioning of mercury cells at chlor-alkali 
plants, which occurs periodically as these units are phased out in 
favor of newer membrane cell technologies.
    According to a November, 2006 report, Summary of supply, trade and 
demand information on mercury prepared by the United Nations 
Environment Programme: Chemicals, the United States is currently a net 
exporter of mercury. This report also states that a major portion of 
mercury that enters the international market is used to amalgamate and 
extract gold particles from soil and gravel in the relatively 
unregulated artisanal and small-scale gold mining sector, and that this 
use of mercury is the largest global source of mercury releases to the 
environment, accounting for 650 to 1,000 metric tons of mercury 
releases per year, equivalent to about one-third of all global 
anthropogenic releases. The report notes that this use of mercury, 
which is largely limited to the developing world, involves serious 
occupational health hazards and ``has generated thousands of polluted 
sites, with impacts extending far beyond localized ecological 
degradation, often presenting serious, long-term environmental health 
hazards to populations living near and downstream of mining regions.''
    The Quicksilver Caucus organization formed by state environmental 
associations (http://www.ecos.org/section/committees/cross--media/
quick--silver), to foster the development of holistic approaches for 
reducing mercury in the environment, has developed a set of principles 
regarding trade in mercury. These principles indicate that mercury 
should be stored and not exported, unless it is clearly going to an 
essential use. Essential uses include lamp manufacture, and the 
manufacture of selected pieces of scientific or technical apparatus.
    The Department also understands that the European Union, which 
expects to see many of its chlor-alkali plants phase out their mercury 
cells over the next few years, is likely to soon ban mercury exports. A 
similar ban by the U.S. could help reduce the current ready 
availability of mercury in the international market to dispursive uses 
such as that of the artisanal and small-scale gold mining sector, and 
thus help lower mercury pollution internationally.

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